Dell: VARs Don't Want A Distribution Program

"The one thing we're hearing is that [solution providers] like that direct relationship with us. They like the build-to-order and instant configuration that saves them time and money when it comes from us and it's ready to roll," Chris Bates, director of Dell's Solution Provider Direct division told CMP Channel at XChange '07 in Orlando, Fla. "They like the strong accountability, the one throat to choke."

Many channel observers see Dell's best chance to win over a large number of solution providers is by turning to distributors who could act as a buffer between the vendor and solution providers. Bates wouldn't rule out signing a distributor, but he didn't make it sound like a priority either. "We're talking about everything, but we're hearing a lot about the benefits on focusing our direct relationship with the channel," he said.

That wasn't the case for at least two solution providers who visited Dell's booth at the XChange Solutions Pavilion. "It would be better [if Dell went through distribution]," said Scott Moat, president of Computers And Beyond, a Marshall, Minn.-based solution provider. "Especially if they could stock products that we could order like we do through Ingram Micro or Tech Data."

Moat said he still might look at adding Dell to his company's solutions portfolio if he had to procure the products directly from the vendor. "I have some clients that ask for it."

Added David Dechant, CFO of Computer Software Innovations, Easley, S.C., "We would prefer them be in distribution because that's our business model," he said.

Like many other VARs at XChange, Dechant wanted to hear what Dell had to say. "I was pleased to hear the CEO of Silverback had a strong relationship with channel. I see that as a positive," he said. "We're taking a wait and see attitude. [Phillips] mentioned that he's always been entrenched with the channel with their product. It'll be interesting to see."

At least one visitor to Dell's booth, Ted Hunter, president of Champion Networks, a Brunswick, Me.,-based solution provider said Dell should avoid distribution relationships. "They don't require it. They can take their system that is more efficient and less costly and tailor that model. They don't need Tech Data or Synnex or Ingram Micro," Hunter said. "I don't think [distribution] should be an issue. If you cut out the middle man, there's more dollars to negotiate."

Hunter said he is skeptical but optimistic regarding Dell's channel strategy. "The coffee's started perking, but you don't know how it's going to turn out. I don't care if my customers buy direct from Dell, as long as they buy what I tell them to buy. The key for Dell is to pick one to five niche markets with a small number of VARs and build those relationships. Build best practices. Only then will [more VARs] deploy with them."