Dell's Distribution Deals: Ingram Micro, Tech Data To Carry Desktops, Notebooks
The onetime channel nemesis has come full circle, signing a deal to carry fixed-configuration Vostro desktops and notebooks through Ingram Micro and Tech Data in the U.S.
The agreement will soon be extended to Canada and eventually to other geographies and include more product lines, said Greg Davis, vice president and general manager of Dell's Global Commercial Channels. But for now, the three companies will work to build a program providing solution providers with one the biggest brands in the industry.
"We see an opportunity here to grow and expand the reach of our partners," Davis said. "We are excited to engage in a distribution relationship, to have inventory of our product available to VARs and solution providers. I expect Ingram Micro and Tech Data to market and recruit new partners. They'll work with our existing partners. We will work with them on marketing activities."
Dell, which now has 15,000 solution providers buying products directly from it, has been asked by many of those customers for a distribution relationship in which they can get preconfigured PCs within a 24- to 48-hour period.
"Our partners tell us that working directly with Dell is a great thing. They enjoy doing that, but there are cases where they need a product and need it quickly. Ingram Micro and Tech Data meet that need," said Davis.
The distributors initially will carry 11 desktop configurations and three notebook configurations, said Keith Bradley, president of Ingram Micro North America.
"We're obviously very excited. This is a strong, strong endorsement of the power of the channel. There's lot of VARs already selling Dell but the experience of the channel has been less than optimized for them," Bradley said. "By [Dell] embracing the channel, we can leverage our deeper levels of inventory, our tech support, training, marketing support, all the things that VARs have loved the last 20 years or so."
The addition of Dell through distribution should help alleviate concerns that solution providers might have had dealing directly with Dell, given that vendor's legacy of selling direct, said Ken Lamneck, president of the Americas at Tech Data.
"That's one of the objectives that Dell has in mind with a broader reach," Lamneck said.
Solution providers have long been asking Tech Data to add Dell products, Lamneck said.
"They would say, 'We need a full solution and we don't want to buy direct. We want products that we need, that our customers are asking for, and you don't have them.' That was a big, gaping hole to what customers are asking for that we couldn't provide," he said.
Both Ingram Micro and Tech Data planned to relay the news to Hewlett-Packard, Lenovo and their other desktop and notebook vendors right before noon EST on Tuesday. HP and the other vendors likely won't be thrilled with the news that their top distributors are picking up their biggest competition, but both Bradley and Lamneck said they plan to tell all their vendors that it is an incremental opportunity and won't change their plans with those vendors.
"What we want to do is assure our key vendor partners that this isn't about switching business, it's about growing business, and supporting our customers with what they are asking for. We will not lose any focus for our key vendors in these categories. We want to grow our total business," Lamneck said.
Added Bradley: "As far as we're concerned, this is incremental revenue for the channel and our VARs. This has no impact on anything we're doing with our [other] vendor partners."
Ingram Micro also plans to get the word out to solution providers to tell them that the best place to buy Dell is through distribution, Bradley said.
"The channel is the most efficient way to market. It's one-stop shopping to get credit, inventory, tech support. I encourage all customers to one-stop shop with the channel," he said.
Davis also said Dell could not tell the distributors how to price the products, but said he has shared the discounts VARs get direct from Dell to ensure a level playing field for all parties.
"We always had to provide competitive pricing to the channel. We enter into this agreement intending to be competitive in the marketplace," Davis said. "Our prices to the channel are a discount off of our best prices online."
Dell also has no immediate plans to add more distributors, Davis said.
"Right now our focus is on making these two relationships work well, kicking off our product lines and looking to expand quickly into Canada as well as outside of North America, and expand our product lines. The focus right now is around those three things," he said.
The distribution relationships have the full support of Michael Dell, according to Davis. "I provide Michael reviews on the channel business constantly. He's very supportive of the work we've done in the channel and these two very large relationships," he said.
The distribution deal marks a clear cultural change within Dell, but one that is more evolution than revolution, according to Davis.
"We have things like deal registration that have been a great success for us. We said it was going to take time. This is a product of the progress we've made, but we have more work we want to do. This one more step in the evolution of our channel program," Davis said.
EDWARD F. MOLTZEN, ROBERT DEMARZO, BRIAN KRAEMER and CHAD BERNDTSON contributed to this story.