Dell moves closer to local channel model

The path is clear for Dell to concentrate on building a corporate channel within the Australian market

Now that its retail partnership with Officeworks has been announced, the path is clear for Dell to concentrate on building a corporate channel within the Australian market. More than one potential partner in discussions with local Dell executives has suggested its PartnerDirect program could be up and running as early as next month.

Best known for its direct sales model, Dell has made moves to engage channel partners in markets around the world since company founder, Michael Dell, retook the chief executive's reins from Kevin Rollins at the start of 2007 following a spate of disappointing financial results.

Locally, Dell has already made quiet moves to partner with a small number of local integrators. ComputerCorp, for example, inherited service and support business with the Department of Defence when acquiring CES Computers in 2005. But its ACT state manager, Greg Irvine, was lukewarm on the prospect of reselling Dell hardware.

"We may engage on a project by project basis as long as it doesn't impact on our existing vendor relationships," he said.

From Dell's perspective, building a corporate reseller base would help it be more competitive against established channel players like HP and IBM given that SMB continues to be the biggest growth market. One reseller that has been in discussions with Dell, but asked to remain anonymous because an agreement was yet to be finalised, said the biggest ongoing issue Dell had with customer complaints was a shortage of local representation.

With a growing trend for companies to sign global hardware contracts, particularly in the mid-market, he said a relationship with Dell would help his company strengthen its position with clients that were currently sourcing its hardware from elsewhere under global agreements.

"Some companies are being forced to buy hardware under global agreements and those based in Europe, for example, often buy Dell because they're serviced very well in that market," he said. "It's a different story here."

Another local integrator that has also spoken with Dell in recent weeks, but asked to remain anonymous at this stage, said he would be interested if it came back with a good partnering strategy. He said initial discussion with channel strategy director, Joel Montgomery, had suggested Dell was looking to appoint a relatively small number of solution providers rather than throwing access open to anybody that wanted to sign on the dotted line.

One thing that could slow Dell's plans to announce its PartnerDirect channel program locally is Montgomery's recent resignation. A company spokesperson confirmed he had left the company and said the process of finding a replacement channel strategy director was underway.

But regardless of how quickly the program is launched, Datacom is one integrator that looks unlikely to become a Dell partner anytime soon. Managing director of its Queensland operations, Clark Hobson, said he hadn't been contacted.

"They probably figured out that we're a big HP partner and wouldn't be interested," he said. "And you'd need to have a close look at whether a company with a history like Dell's could engage the channel in any meaningful way... at least in the short term. There's an education process you need to go through to do channel sales well and you can't just invent it overnight. We would take a wait and see approach."

Klikon Solutions sales director, David Abouhaidar, fully expects to be a target if and when Dell rolls out a formal channel model but said any approach would not be welcomed.

"I'd throw them out of the back door as quickly as they walked in the front," he said. "I have no interest in partnering with Dell because we've been competitors for too long."

More about: ACT, CES Computers, ComputerCORP, Datacom, DataCom, Dell, Department of Defence, Hewlett-Packard, HP, IBM, Officeworks
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