VARs Still Unsure a Year After Michael Dell`s Return

By Jessica Davis  |  Print this article Print

PC Maker Dell has made huge changes in the past year since its founder returned to run the company.  But has Dell done enough to turn his namesake company around? 

It's not your father's Dell anymore.  PC maker Dell has marked a sea change in the last year since its founder, Michael Dell, returned to its helm on Jan. 31. Among the major changes he made to the company he started 23 years ago was to reverse the deeply entrenched direct-only sales approach.
Almost immediately after his return, Dell floated a trial balloon about introducing a channel partner program. Soon after Dell announced that it would launch a formal channel partner program and that it also would begin selling its PCs through retail outlets such as Wal-Mart. Dell quickly announced, one by one, a handful of retail outlets that would carry the company's computers including Best Buy and Staples.

"These channel changes are not the only thing which Dell is working on to gain back lost market share and grow – but I believe they are a critical component to getting Dell back on track," said Tiffani Bova, research director of IT Channel Sales, Programs and Alliances for research firm Gartner. Gartner recently released a report entitled "Dell Shifts Global Sales Strategy to Gain Back Market Share."

Dell's new channel approach also freed the company to acquire other vendors that had strong channel programs in place. Dell announced plans to acquire EqualLogic. And then Dell announced plans to acquire Silverback, a managed service provider platform company. The company also bought Everdream and ASAP Software.

The news left EqualLogic and Silverback partners wondering whether ultimately they would be competing with Dell's direct sales force on accounts that were previously protected. Dell kept those partners in the dark until the end of 2007 when it finally announced the details of its channel partner program.

The program that Dell developed over the course of 2007 includes a deal registration component protecting deals of $50,000 and greater, and other benefits for partners. Yet EqualLogic, Silverback and potential Dell reseller partners remained skeptical. Many told eWEEK Channel insider that they were adopting a wait-and-see approach to their relationship with the PC maker.

And Silverback partners learned that Dell planned to sell Silverback services directly to customers. Dell promised, however, that its offering would be complementary to what partners offered.

Dell's moves have left channel partners skeptical. The ultimate test of Dell's new programs for its nascent channel will be in how the company executes its promises.

"It will take time, consistency, commitment, communication and a willingness to work in collaboration with the channel and not in conflict," Bova said. "It has to happen from the senior levels of the company all the way down to an inside sales rep. Inconsistency or sales efforts which do not align to this new effort will quickly hinder Dell’s ability to gain trust from the channel."

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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