QUICKHITS
Dell’s Channel Program:
No Longer Hiding in Plain Sight
DELL, THE COMPANY THAT MANAGED to
reap about $4 billion in channel sales in
2006 without a formal partner program, is
developing relationships with VARs and
other solution providers to reach the thousands of SMBs around the nation.
“They’ve had a somewhat strained relationship with VARs in the past,” says
Richard Shim, a research manager at IDC,
noting the financial success of Dell’s “
secret” channel. “Dell is very successful in
large enterprises and commercial [sites], but
SMBs have been a tough nut for the company to crack. The VARs understand SMBs.
They’re in the trenches.”
Until earlier this year, the Round Rock,
Texas-based vendor worked with VARs and solution providers on a case-by-case basis. But
in August, the company took a giant step toward embracing resellers when it named Greg
Davis, previously president of Dell Canada, to
the position of vice president of commercial
channels, a move existing Dell resellers hope
will provide them with increased resources,
visibility, and legitimacy.
DOWN THE ROCKY ROAD
Five years ago, when Woodland Hills, Calif.-based Bagdan Consulting Inc. began selling
Dell products, the PC maker required that
VARs commit to buying at least $100,000
worth of its equipment, says Steven Bagdan,
president of the IT consultancy. The 20-
year-old firm had just won a large contract
for multiple servers and desktops, so it had
no problem fulfilling the requirement. Since
then, Bagdan’s firm has seen its revenue
more than double—sometimes increasing
fivefold—each year.
Despite Dell’s comparatively channel-un-friendly stance, Bagdan opted to resell Dell
offerings due to the direct vendor’s high-quality products, brand recognition, and use
of standardized components such as hard
drives, he says.
Likewise, SBBS Software & Consulting
Inc. began selling Dell products to its residential and SMB customers about five years
ago, based on the vendor’s competitive pricing and array of product options, according
to Scott Gordon, president of the Glenview,
Ill., reseller.
“SBBS has had both good and bad experiences with Dell over the past five years,”
Gordon says. “The biggest problem we’ve
faced is that when the [Dell] sales team
changed, it has never been a smooth transition. It just happens overnight. The last two
[Dell] sales teams SBBS has been assigned
to have been fantastic, and I hope nothing
changes for a while.”
Another challenge, say VARs, is Dell’s lack
of marketing material and preapproved logos. But developing collateral is just part of
the picture, says IDC’s Shim. The company
must also establish relationships with companies it formerly shunned.
“A lot of their success hinges on building
these relationships with VARs, and they
haven’t really talked much about it,” says
Shim. “It depends a lot on the [program] details. Dell hasn’t been willing to give up
much of the margin; at least they haven’t in
the past, and they’re going to have to.”
“Direct business is fine for the consumer,
but with larger companies that doesn’t
work,” says Bagdan. “[Larger companies]
need a VAR to support their business models, as well as their hardware and IT infrastructure. This will do nothing but benefit
the channel.”
OBIT
Born: 1985
Began Uncertain Future:
Earlier This Year
TODAY WE MOURN THE PASSING
of Cow-Spotted Boxes, the signature of Gateway computers.
Gateway was recently purchased by Acer,
a company with solid engineering but absolutely no trace of whimsy. Cow-Spotted Boxes turned cold hardware into
warm smiles. It may be unusual for OOBE
to stand for Outside-of-the-Box Experience, but for fanciful Gateway, the outside was often more fun than the inside.
Whimsy started early at Gateway, as
the ponytailed founder set up shop in
Sioux City, S.D., rather than in Silicon Valley. Obviously, the force of whimsy was
strong in that one.
The now-famous Cow-Spotted Boxes
may have been born of an accidental run
of bad printing that ruined an early batch
of shipping boxes, or they could have
been created in a purposeful union. If a
mistake, whimsy turned potential disaster into a billion-dollar branding bonanza.
If on purpose, the entire notion may be
even stranger.
Cow-Spotted Boxes may live on, but
they’ll never be the same. The lifeblood
of whimsy comes from upstarts in South
Dakota, not deliberate executives in Taiwan. Serious people who are paying serious money for a company are usually too
short on whimsy to take a chance on
Cow-Spotted Boxes.
Send donations to the Northern South
Dakota School of Whimsy.
— James Gaskin
—Alison Diana
