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Dell answers critics about future channel strategy

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A few weeks ago, I surmised that Dell is too silent regarding what it has in store for the computer reseller and system integrator market it intends to enter soon. The company has been rather quiet on that front in recent times as it entered the consumer retail market and planned other sales strategies beyond direct selling to get back in the race with competitor Hewlett-Packard Company (NYSE: HPQ). On December 5, Dell, Inc. (NASDAQ: DELL) will unleash its reseller channel industry plans after much anticipation.

After more than a decade of competing against the reseller channel, Dell now intends to partner with that segment to get more of its wares in front of more customers. Sounds like a tough proposition, right? Former competitors warming up to a new brand and product line is probably not going to be easy. The price will have to be right, the incentives better than the competition and other things will need a carefully executed strategy if Dell thinks it can just move in and displace competitors. Many channel resellers probably look forward to having another brand to offer customers, as price competition will ultimately help them. But make no mistake - it won't be some easy deal for Dell.

Trade publication Computer Reseller News (CRN) suggested 10 steps that Dell should take to ensure its new channel program doesn't begin on the wrong foot. Dell's VP of commercial channels, Greg Davis, then responded to the point-by-point steps with vigorous (and somewhat defensive) language, which says right off that Dell is not being a wimp when it comes to its critics. That is a good sign.

So, what we have are some solid points and rebuttal by Davis. In a nutshell, the questions about Dell's future strategy in the channel centered on its leadership team that needs to be ready for the challenge (and how Davis is leading the charge) to how to compensate sales folks on channel sales more than for direct sales to spur that end of the business into high orbit (Davis: "It's not going to happen"). Read the entire 10-questions Q&A here and judge Dell's upcoming channel strategy for yourself. Does it have a chance?
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Last updated: July 05, 2009: 12:13 PM

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