IBM, HP Executives: Dell's Inexperience Will Blunt Channel Effort

IBM Hewlett-Packard

"It's not so easy to understand partnering and to understand the channel," said Kevin Gilroy, HP's vice president and general manager, North America commercial channels. "You can't just throw a box at the channel and pretend you have a channel program. It's not about boxes; it's about understanding channel economics. We have always supported the channel, and it's kind of interesting that Dell is now singing the channel's praises."

Frank Vitagliano, vice president of distribution channels management for IBM's PC Division, said, "It's Dell's official endorsement of the value of the channel in the SMB space. I still believe the approach to the market is a solutions one."

IBM differentiates its products with features such as integrated wireless and because of that, IBM partners can wrap support and service around the product, Vitagliano said. "Our approach lets solution providers wrap support around a product vs. just selling a box," he said.

Dell, for its part, continued to hold focus groups behind closed doors at Breakaway. The Dell executives attending the show declined to comment on the solution provider input they received.

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But solution providers attending the focus group said they were concerned about Dell publishing product prices with the new white box and incursions Dell direct might make into their customer base. "They seemed to have an answer for everything," said one focus group attendee, who requested anonymity. "The feeling was that we'd probably give it a try, but Dell will have to prove itself,"

But Ross Harris, president of Worldnet Computers, Aliso Viejo, Calif., said he could build for about $100 less the same white box Dell intends to sell to the channel for $499, plus he could guarantee consistent components in each system he sells. He said he had no intention of participating in the Dell program.