Dell plans channel shake-up

CEO gives indirect biz green light

By Kelly Fiveash, 17th May 2007

After decades shunning the indirect market, struggling computer maker Dell has said it will slip into bed with resellers in the hope of shifting more boxes.

The computer giant has in the past been reluctant to work with third party vendors for the core of its business, making much of its strategy of selling direct to customers.

But with declining sales, a fraud lawsuit pending, and an accounting investigation taking place, it is not that surprising that the firm has decided to make radical changes to its business model.

Talking to CRN US, CEO Michael Dell said the change of strategy was about giving customers what they wanted:

"There are certainly folks out there who don't want to buy direct, so now those customers will have a chance to have Dell product as well."

The direct model mantra had set Dell apart from other computer makers such as HP and IBM, the logic being that inventory costs could be kept down by avoiding the retailer route.

But Dell is no longer in the driving seat with sales, having been knocked off the global number one spot by rival HP.

The indirect channel decision follows yesterday's revelation that New York Attourney General Andrew Cuomo has filed a fraud lawsuit against Dell on behalf of angry customers.

Dell said the firm plans to "ramp up" key retail and reseller partnerships worldwide and conceded that "we have not done as much in the channel as we probably should have - certainly not as much as we could have. So now we're going after it."