Dell's Secret Channel

By John G. Spooner  |  Posted 2006-05-11 Print this article Print

Customer pressure is driving more resellers to work with direct-market giant Dell, and Dell is making it easy for them. But don't tell Wall Street.

Dell and the channel are secretly growing fond of each other.

More and more VARs (value-added resellers), indifferent to shrinking hardware margins and prodded by price-sensitive customers, say they are buying Dell computers for their clients.

The Round Rock, Texas, PC maker embraced resellers by granting them visits from account representatives, sales support and even hardware discounts, VARs say.

Is there a chink in Dell's armor? Click here to read more.

That Dell is seemingly growing fonder of the channel should be no surprise. Some industry insiders estimate that 20 percent or more of Dell's revenue is derived from the channel. VARs offer the PC maker incremental business opportunities, which it might not have been able to win on its own. The company can also fill those orders using its traditional direct-sales mechanisms to provide hardware to the VARs at a time when it is wrestling with slowing unit shipment gains—and PC market growth itself is slowing, according to analysts and Intel—while it sees tougher competition from rivals Hewlett-Packard and Lenovo Group.

Read the full story on eWEEK.com: Dell's Secret Channel

John G. Spooner John G. Spooner, a senior writer for eWeek, chronicles the PC industry, in addition to covering semiconductors and, on occasion, automotive technology. Prior to joining eWeek in 2005, Mr. Spooner spent more than four years as a staff writer for CNET News.com, where he covered computer hardware. He has also worked as a staff writer for ZDNET News.

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