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Dell says direct is best, aims for No. 4 in server market

Dell says direct is best, aims for No. 4 in server market

At a press briefing on Dell's technology strategies, company officials underscored Dell's commitment to the direct sales model it has used since the company started in the early 1980s. "More than 85 per cent of Dell's worldwide sales are direct and we see that as a trend that will increase not only for us, but throughout much of the industry," said Eric Harslem, senior vice-president of US-based Dell Product Group. "For the corporate and government and high-end user markets that we focus on, we find customers don't want to go through a reseller. We see the reseller channel as one more mark-up and one more barrier between us and our customers. Having said that, we do occasionally partner with VARs who can really add something significant to a project, rather than simply screw the hardware together. We have manufacturing plants for that."

"For us, there's not a lot of money to be made in the retail sector," said Sydney-based Dell product manager Rob Small. "By staying direct, we're able to keep inventory levels relatively low, which means we can devote our energies to new technologies, rather than having to sell off older product lines. Under those terms, the focus becomes what our customers need, rather than what we have in stock."

Harslem said Dell customers can expect "large - frequently geometric - increases in speed and storage capabilities from Dell products" in the future. Dell's goal, he said, is to become number four in the world PC network server market. Currently they are number five behind Compaq, IBM, HP and DEC.


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