Which Vendors Will Feel The Dell Heat?

The biggest question surrounding Dell's upcoming entry into the VAR channel is whether the move will impact the selling habits of solution providers. In other words, which brands stand to suffer the most if Dell can make inroads into the channel?

ROBERT C. DEMARZO Can be reached via e-mail at rdemarzo@cmp.com.

If that's the No. 1 question, then the second biggest question is what will those vendors do about the threat? Let's face the fact that Dell could impact the channel strategy of just about every major IT vendor that plays in the storage, printer, notebook, desktop, display and server categories. That's why CMP Channel, which operates CRN and VARBusiness, conducted an exclusive study recently to enlighten both solution providers and key vendors of the pending threat that Dell poses and what can be done about it. (We published some of this research information on ChannelWeb.com and plan to post more stories in the future.)

So let's get to the heart of the matter—the vendors that could be impacted. When it comes to the display category, the brands that VARs said they would de-emphasize if they increased their Dell sales were Acer and ViewSonic. For solution providers not yet offering Dell, they placed the ViewSonic brand at the top of the list of products they would sell less of if they were to engage with Dell, followed by Acer. Based on the research, solution providers said today's vendors in the display market would have to combat Dell with better pricing while being an easier company with which to do business. The study did reveal a large number of VARs already selling Dell displays, as it came up the third most popular brand offered.

Now, in the printer space where the majority of solution providers surveyed were selling Hewlett-Packard, one wonders if there would be more of an impact across the vendor spectrum. But if Dell were to make inroads, it would come mostly at the expense of Lexmark and, of course, market leader HP. It's no secret that Lexmark is one of Dell's printer suppliers, so solution providers effectively would be selling the same product to their customers. But there is a perception that Dell is much more price-competitive than Lexmark and other printer rivals.

If you look across all of the categories, solution providers were unanimous in their thinking that the best way for vendors to stave off a Dell incursion would be to offer better prices and make their organizations easier for partners to engage with. So what should vendors do? Well, for starters they should be having deep conversations about their product or price advantage over Dell and making sure their relationships with existing partners are strong—all the while focusing on recruitment in the event that Dell does eat into their channel market share.

SEND ME A LIST OF THE VENDORS YOU THINK WILL FEEL THE IMPACT. CONTACT CMP CHANNEL EDITORIAL DIRECTOR ROBERT C. DEMARZO. AT RDEMARZO@CMP.COM.