Well, Dell?

By Joel Shore, ITworld.com |  Business

It's a love-hate relationship. You and Dell. Dell and you. Dell and the channel. Dell and anything between it and the end-purchaser. What's it going to be this time around? Are you feeling a bit, uh, reluctant? No? Me, too.

You've got to admit it's awfully hard to embrace a company that has spent the better part of the last 20 years relentlessly attacking you, your company, and your business model with verbal machetes. But Dell -- at least for the moment -- wants to be your friend. No, really. Forget that just today (Thursday, May 24) Dell said it would begin selling PCs in Wal-Mart. But that's another story for another day.

Whatever one may think of Michael Dell, it's clear that he is a very, very smart guy. When he started selling PCs out of his college dorm room -- so the legend goes -- he was espousing a direct sales model. It's possible he had never heard of multi-tier distribution. Direct was, well, direct. He talked to his customers and built PCs to order. Simple. Clean. Elegant. And low, low overhead leading to rock-bottom prices.

That model has worked beautifully, launching Dell into the stratosphere of American companies. Though it was two kids, Bill Gates and Paul Allen, who dreamed of "a computer on every desktop and in every home," it was Michael Dell who figured each of those systems could be one of his. It's a vision that's hard to argue with.

Prices have remained attractive. On Dell's Web site, it offers a PC running Windows Vista and with a half-gig of RAM for a measly $359 (no monitor). Heck, I paid more than that in 1984 to increase the RAM on my dual-floppy IBM PC from 256 KB to 320 KB. Why would I ever need more than that? Granted, this PC doesn't have the management features essential in a corporate network, but the company is no doubt selling them by the trainload.

The fact is lots of companies continue to buy their PCs, servers, storage subsystems, and more from Dell. And Dell has always had channel distribution business model. Sure, it was treated as an evil sibling, rarely spoken about and then seemingly only when it was unavoidable.

On its way to invincibility, something happened at Dell. Post-sale customer service fell off a cliff. And that led to a declining reputation, resulting in missed sales opportunities, lots of them. That's the key problem with a direct sales model: there's never enough shoe leather on the streets to provide high levels of service.

And there you are, with just such expertise. So Dell is, all of a sudden, making nice, legitimizing its long-standing illicit affair with VARs, resellers, integrators, and the like. Let the light shine upon thee.

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