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yARN: Why Dell is making all the right noises

yARN: Why Dell is making all the right noises

The question is whether it can form a channel harmony

When Dell first made moves to adopt a channel strategy opinions in the Australian IT industry were far from encouraging.

Despite protestations from Dell founder and CEO, Michael Dell, that the "direct model is not a religion" and the organisation would “pursue new manufacturing and distribution models to address the unique needs of customers in all our markets”, long-term channel advocates and competitors saw it as an undeniable indication the hardware giant’s direct model was failing, and badly. They could see the fat lady waiting to take centre stage.

It was in September 2008, almost a year after launching its first channel program in the US, that Dell counted in the introduction its Australian partner program. Like the US version, the Australian PartnerDirect program was broken into two levels: Registered and Certified. (It has since introduced a third Enterprise tier.)

When the plan was announced the response from the Australian channel community was, as you can expect, less than lukewarm. Without hesitation many openly mocked the Dell decision with one poster to the ARN site having this to say:

“If anyone thinks that Dell will be good at managing their partners and potential opportunities, then they are very much mistaken and they will be very disappointed. Dell has a direct model at the very core of its business systems, practices and policies - it will always look to go direct. This is just their attempt to get more business - outside of its direct salesforce (which it is still maintaining).”

It is fair to say this was a commonly held view not just in Australia but also at home in the US.

But after watching the vendor’s improving approach (it even has a blog for the channel) and sitting at a roundtable with Dell’s channel strategy manger, Rob Makin, where he openly encouraged partners to tell him what they need from Dell to improve their own businesses, I get the feeling the channel is starting to warm to this newly-composed tune.

Those across Australia that have joined Dell’s inaugural partner program include WA-based Accord Crox, Kiandra in Melbourne, SA-based VInet, DWM, Strategic IT on the NSW Central Coast, and MCR.

Five-year-old VInet made the switch from fierce rival, HP, to Dell late last year. Co-founder and managing director, Stuart Davis, said it was looking for a differentiator against other channel players in the market.

The question now is how many others will join in the Dell channel chorus?

For me, that will depend on how it executes its distribution strategy. In April, Dell brought on its first two distributors - Ingram Micro and Tech Data – in the US and flagged plans to extend the model globally.

Dell hasn’t appointed any distributors in Australia yet and whether it decides to replicate the Ingram agreement downunder is uncertain. However, if it does decide to appoint even just one distributor – even a smaller boutique player – it will go a long way to placating fears it will slink back to its direct ways. And if it does bring on two big distributors domestically then there will be no turning down the channel volume.

Yes, the fears and lingering distaste over its direct ways will remain for some time, but if the vendor continues to make the noises it is making now, the Dell channel song may just be a tune many partners can’t help but dance to.


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