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Identifying the competition

Identifying the competition

As self-proclaimed champions of the channel, we at Australian Reseller News have always considered Dell to be the enemy.

Dell was direct and direct was bad.

That still holds true for all the resellers out there who rely heavily on selling boxes, particularly retail businesses. But I must admit I have been surprised by the number of corporate resellers who have recently told me they are more than happy to go into a deal with Dell as the PC supplier.

In fact, some have commented that they prefer Dell to the traditional channel favourites, Compaq, Hewlett-Packard and IBM.

These players aren't particularly interested in PC margins any more. They see services revenue as their lifeblood and PCs aren't much more than a troublesome, if essential, part of any solution. Dell has a reputation for being a reliable and timely supplier and it seems that's all many resellers want these days.

As one managing director of a large integrator, who is obviously still stinging from Compaq's dreadful supply problems last year, asked me recently: "Is it worth bidding Compaq and risking supply issues, which could sour the whole deal and jeopardise all my services revenue?"

In the end, it's often easier if the customer wants Dell, he said.

It's not just Compaq that had supply issues last year. Both IBM and Hewlett-Packard ran dry on various models, as did tier-two players like Acer.

That's not good enough any more. The message to the traditional PC players is that if you want to retain both customer and reseller loyalties, you have to match Dell's supply efficiency.

Better the devil you know

But it's not just the issue of supply that is making Dell increasingly attractive to many, especially larger, integrators.

IBM, Hewlett-Packard and Compaq all have powerful services arms and indeed all three have very clearly indicated that much of their future growth will be tied to the services business.

What's more, these major IT players are constantly coming further and further down the scale as they look to expand their services reach. Today, they are major competitive forces against the tier-one integrators and resellers. I'm sure even tier-two integrators run up against them occasionally. If you're not competing with them on a services basis yet, how long will it be before you are?

I'm not saying it's unreasonable for vendors to want a piece of theservices action, but their channel friendliness has to be judged on their level of greed. I'm hearing disturbing rumours of these players coming in and taking all of the services business for themselves. That's not on either. Any vendor that wants to play in the services space and stay channel friendly must play on a partnership basis, sharing the services spoils with their partners.

So who do you consider a bigger competitor? The direct-dealing PC vendor or the services-greedy computer vendor? Makes those white boxes look good, doesn't it?

E-mail the editor at philip_sim@idg.com.au


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