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The old curiosity shop

The old curiosity shop

It is a curious world. The week after Michael Dell tells us the only model to follow is the direct-to-customer model, both Dell (the company) and Gateway 2000 (the other direct champion) admit they use resellers when they have to.

I've always been impressed by the marketing work of both companies. Those glossy ads in the PC magazines are very good. If you haven't checked the Web sites of both companies you should (www.dell.com and www.gw2k.com). It could give resellers some ideas about how to sell products and services over the Web.

I was also impressed when Michael Dell listed some of his company's largest customers. In its current annual report Dell highlights Boeing and MCI. Then I started to think about Boeing and MCI.

Boeing coordinates the efforts of thousands of suppliers from all over the world. Those include Aerospace Technology in Melbourne, and Hawker de Havilland in Sydney.

So Boeing can pull together components that can be as small as pop rivets and as large as RB-211 jet engines and it turns them into a 747 jet aircraft.

The people at MCI are running the second largest phone company in the US.

I would certainly hope that Boeing and MCI could buy computers direct from the maker and string them together in a network.

For a small business, buying a few PCs and some network cards and hooking them together with a printer is something at the other end of the scale from Boeing and MCI.

Likewise it should also be easy.

But what about the vast middle ground?

I still don't believe small and medium enterprises (SMEs) will want the bother of stringing PCs together. I do believe Michael Dell and his company are wrong to assume that going through a dealer attracts related price markups on PCs.

If the dealer is doing his or her job, then that markup should represent the added value of service the dealer can bring to the sale. You will never get that service from a Web page.

Slash and burn in the orchard

While we are talking about the direct model, is this the only option left for Apple?

For an interim CEO, Steve Jobs has been very active. He's been slashing and burning at divisions within the company and making major strategic decisions that the yet-to-be-appointed permanent CEO will have to live with.

The problem is that Apple's dedicated army of resellers may decide to turn to the Wintel camp. That would leave Apple to increasingly follow a direct model. It would certainly be an easy move in Apple's two largest markets - education and publishing.

Maybe Steve Jobs should take a few lessons from Michael Dell.


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