Dell Taking First Steps Toward Channel Expansion

Computer maker Dell is taking its first concrete steps toward its channel expansion strategy, opening its new small and mid-sized business lineup to solution providers and engaging an outside research firm to strengthen its roadmap.

The Round Rock, Texas-based company announced its new Vostra brand of notebooks, desktops and service for small and mid-sized businesses Tuesday, and Chairman and CEO Michael Dell said channel partners would play a role in its deployment.

"We're giving you a choice to buy Vostro directly from Dell or from your local solution provider," Dell said, speaking to a "Town Hall"-style audience at the Reuters' building in New York City.

"We have undertaken a strategy at Dell to expand the number of places that people can buy our products, and (are) also working with partners," he told the audience of SMB customers. "We had a partnership model for quite some time. We probably weren't as explicit as we are right now. There are a lot of great partners out there who add a lot of specific value around software and services, and we want to grow those partners here and around the world."

Dell told CRN in May that his company had reached the $4 billion-a-year mark in sales through North American solution providers and that it was one of the strongest growth areas of Dell's business. Dell executives also said the company would roll out dealer registration and certification programs for resellers and solution providers this year.

Following the small business meeting, Frank Muehleman, vice president and general manager of small business sales for Dell, said the company was still on track with that time table. He said Dell had also hired a third-party research firm to help it develop items "three, four, five and six" for its channel program, and that was moving quickly, too.

In a question-and-answer session with reporters, Michael Dell suggested the company was on the right track in turning itself around after more than a year of declining revenue, profits and market share, but that work remained.

"I think we've made a little bit of progress but I think we have a long way to go," Dell said. "We have set out to really transform the company and looked at the company really broadly. We've said there are things we're doing well, things we aren't doing well. There are new things we're doing to reignite growth. There are new areas we're expanding into like services, new geographies, product lines. . . acquisitions to compliment our growth strategy as we grow further."

In other areas, Dell said: The company will likely add Linux to its small and mid-sized business lineup at some point in the future, but stopped short of providing specifics; the Vostro lineup would focus on the client, with its PowerEdge server lineup staying in place for commercial accounts; though adoption of Microsoft's Vista operating system is growing, Dell would continue to offer both Vista and Windows XP to customers for the foreseeable future; Dell has no plans to release a competitor to Apple's iPhone.

During the session with small and mid-sized business owners, Dell was also provided the opportunity to show some humility when one woman who runs a small business said she had been having a hard time simply getting a new Dell PC to connect to her network. Calls to Dell support didn't help and dragged out too long for her to get a replacement.

"It sounds like we should do a better job of supporting you and getting you up on the network," Dell told her.