Dell out of context?
I have just read your opening piece in Australian Reseller News (April 12) and that of your journalists and I feel compelled to comment.
I am not quite sure why you are suggesting that Michael [Dell's] attitude toward the channel is one of "We're Dell and you can all get stuffed".
Dell Computer has always been 100 per cent direct, never involving the channel as resellers of our hardware or services in Australia. Since the company's introduction to the Australian market in 1993, Dell has maintained a direct relationship with our customers, large and small.
More importantly, no one from Dell Computer would ever project such an arrogant attitude.
Our customers truly appreciate the time and cost savings that the DellPlus (custom built PC) process provides. Machines arrive ready to plug into their infrastructure, within 10 days, to any location, anywhere in the world. [Dell offers] consistent product, pricing, configuration, post-sale service across Australia or around the world. The channel cannot offer this.
If, as you suggest, Dell is still the fourth most popular PC in the channel, it is probably because we can deliver high-quality products at very competitive prices . . . It is not because we have a discounted price structure in place for resellers who add no value to the end process of building equipment. We know of a number of small businesses that base their business on the provision of solutions for other small companies and choose to use our hardware. We are delighted to supply it to them. If they then bundle this hardware with the provision of their services for selected vertical markets, that's great. That's meeting a customer need that Dell could not provide - we have never claimed to be all things to all companies.
Your comments about any company going direct are misleading. "Direct" is much more than simply selling direct. Our competitors have been talking about it and trying to do it for years and so far they don't seem to have enjoyed any success. Dell's growth in the Australian and global marketplace has surpassed that of all other vendors, simply because customers are voting with their feet.
Your comments about a vendor not providing competitive products do not apply to Dell. We supply what our customers want, if we can.
Our sales results suggest that customers are very happy with the quality and price of these products. But we also sell a huge range of third-party items, many from competitors, simply because this is what our customers want. We offer financing solutions and have a range of services under the Dell brand. But if customers demand a different financing company or a different third-party maintainer, we work with those companies to ensure the customer is happy.
marketing manager, Dell Australia
Editors response -
As I see it, the issue is not Dell's product delivery, quality or ability to ship customised PCs, but its popularity in the channel when it comes to PCs, servers, etc. The channel respects the company for what it is, but there appears to be no reciprocal recognition. And I guess you would ask, "Why should there be?"
Resellers spend their time building up customers and looking after their needs. Their ability to recommend a PC vendor, as I argued, is still an important value proposition - particularly in the SME space where knowledge of end users is limited.
Channel companies can and do contribute to Dell's success - albeit indirectly. What about some acknowledgement that value still lies in the "traditional" distribution chain?
And what about the "feet on the street" concept employed by your competitors? Surely Dell can't service everyone over the Net?
My "get stuffed" comment was meant to question Michael Dell's continued apparent disregard for third-party service providers.
It will be interesting to see whether Dell's success will continue while it remains a lone horse, so to speak. Certainly your competitors believe the hybrid channel/direct customer contact model is the go. Time will tell.
GST delay means a better deal all round
I am responding to your editorial in the March 29 issue of ARN.
Our organisation sells software. I expect, although we have not seen evidence of it yet, that there will be a burst in sales in May and June and then since ALL our prices will increase by 10 per cent due to the GST, there will be a massive decline in at least July, August and September. I think your editorial is heavily biased toward effects of the GST on hardware compared to software.
For very small businesses such as ours who do not have an accountant, so the GST means enormous additional paperwork. You probably do not read the Melbourne Age but Gilmour in the Business section [recently] said 20,000 businesses in New Zealand closed as a direct result of the GST there. The estimate for Australia is at least 80,000.
I would love to see the GST delayed. It would help us.The extra work the GST will create for us is enormous - keeping track of all the GST inputs and then having to do five tax returns a year - the four "simple" GST returns and then a final tax return just takes time away from other business activities.
The GST is only a minor inconvenience for large companies (more than 10 employees) but will be an enormous burden for the small business - I think you have ignored that in your editorial. For a time we had sales tax on software. This was indeed an annoyance but not the devil that the media seemed to think it was. The principal reason sales tax was a problem for us was that . . . we had to maintain two sets of stock we imported - one where sales tax was paid and one where it was not. If we used tax-free stock for sales to a customer paying tax we had to pay more tax than if we paid at time of entry.
I expect the major reason larger computer related organisations like the removal of sales tax is that they hope that it will be more difficult for shonky operators who now evade sales tax. I expect the changes made by the sales tax people a while ago on tax number usage has constrained sales tax evasion by small dealers.
Anyhow, for us at least, I am totally unconvinced that delaying the introduction of the GST would be anything other than a benefit to our business. No delay would certainly mean "small resellers have truly been dealt a bad hand".
Computer Transition Systems
DIY PR not on
Did I detect a touch of arrogance in Steve Townsend's Marketing Opinion piece (ARN March 29) when he suggested that many of the larger PR agencies specialising in IT and financial PR are refusing to take new clients for less than $6000 per month?
Townsend seemed to be suggesting that if you could not afford $6000 a month, then you could probably quite effectively do it yourself.
What a sad day it is when a company cannot go to the PR agency of its choice because of price discrimination.
There must be many IT companies in the country who do need PR services from time to time, but do not want to be committed to a huge monthly retainer.
May I reassure your readers that there are many smaller PR agencies in this country who do an excellent job, are respected and do not charge an arm and a leg!
Corporate Focus, Sydney & Auckland
Recycling PCs eases depression
Recently you ran an article that depressed me immensely (ARN, April 19). I run a company called Fireball Computers in Adelaide which has as its core business the task of collecting and recycling PCs and PC peripherals. We have in the past been able to notify organisations such as schools, corporations and banking institutes of our service. In most situations, we actually BUY the equipment. In most situations we will take anything and everything, regardless of condition, as long as it is PC-compatible. Parts that we cannot use are then delivered to High Technology Metal Recyclers for recycling of the raw materials. So you can see how distressed I became after reading the article depicting companies actually paying to contribute to landfill when my company will buy them and take them away to be recycled.