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Passing Dell By?

Is Dell in danger of becoming just another niche player in the industry? It’s fast beginning to appear that way. A decade ago, Dell transformed the PC business with a supply chain logistical engine that kept inventories low and helped the vendor beat main rivals Hewlett-Packard, IBM and Compaq on pricing.

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In the process, Dell unleashed a direct marketing juggernaut that swayed the world into believing that cutting out the middleman had merit. Forget that resellers contributed a significant slice of Dell’s revenue, direct beat indirect any day, so said Dell. Its eye-popping financial results seemed to support its marketing hype.

The problem is the direct marketing mantra now sounds old and tired, and as the vendor’s growth abates, the world seems to be passing Dell by. Dell’s problem isn’t that the tide in the industry has shifted from direct to indirect, it’s that Dell is a product company in a world that requires solutions.

Dell may have found higher ground in the direct vs. indirect debate, but that debate is no longer relevant.

Why? Because resellers have evolved into solution providers. Customers are no longer on 18-month PC refresh cycles—they want technological answers to business problems. This requires consulting services, software and hardware from a plethora of vendors, and someone to integrate those products into a solution.

Solution providers say Dell now is making renewed efforts to win their hearts and minds with more dedicated channel people, promises to ease conflict between its direct sales team and solution providers, and even, in some cases, market development funding in the form of free products for hitting sales goals. These are all the first signs of a company searching for a real and sustainable channel strategy. But Dell is so far behind HP, IBM and even Lenovo in building partner relationships that it seems unimaginable that it can quickly grow its channel business.

As Rick Chernick, CEO of Camera Corner Connecting Point, a Green Bay, Wis.-based SMB solution provider, told me last week, Dell’s overtures “are too little too late.”

Still, other solution providers say Dell’s brand and marketing clout give it powerful currency to quickly beef up sales through the channel. That may well work short term, but if Dell is looking for an army of reseller box pushers, it doesn’t exist anymore.

Does Dell want to be part of your solution? Let me know via e-mail at

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