Dell Spreads Its Wings In High-Tech Marketplace

At Comdex in Las Vegas two weeks ago, Dell unveiled its first PDA, the Pocket PC-based Axim, starting at less than $200. And in late October, the company started manufacturing an entry-level storage array, the CX200, based on technology licensed from EMC.

Those moves followed Dell's decision this summer to end its HP printer relationship in favor of an OEM arrangement with Lexmark International and to launch a white-box desktop PC program, dubbed Channel Partner Solutions. This year, Dell also started offering its own LAN and WAN products, which prompted partners 3Com and Cisco Systems to sever their Dell reseller arrangements.

In enterprise data centers, Dell is increasingly forgoing third-party solution providers and backing up many of its products with services administered by Dell-badged employees.

Darrell Ward, senior product manager for PowerEdge servers at Dell, said the company uses Unisys, Wang and other third-party providers for physical installations and operating system integration.

Dell also has its own professional services organization to help clients with consulting issues related to server migration, large data centers and Ethernet services. Such services spring from the company's May acquisition of Plural, a New York-based integrator, Ward said.

"Dell has said for some time that it will look opportunistically at expanding services where appropriate," he said. "The Plural acquisition fills Dell's model. We will look to more partners like EDS and may consider other acquisitions."

Still, a rising number of Dell customers are being served by solution providers. Carl Palmieri, CEO of Computer Resolutions, Bridgeport, Conn., said his company has been reselling Dell products since 1991.

"There are [Dell clients out there willing to pay more for our services," Palmieri said. "Dell is only good at sending products out fast at a low price. It's great for one-shots,a small company or an individual,but not for large orders. Some clients let us make a margin with Dell because ordering things like batteries from Dell can be a pain."

Though Dell might look like an IBM or an HP from a distribution viewpoint, it falls well short, according to Palmieri.

"Dell can pretend to look like them, but Dell has no R and D," he said. "They have to either get the technology or the products from somebody else. They're not even in the same plane as IBM or HP."