Channel to Dell - you've lost

Direct vs indirect war is over


The channel model wars are over, and Dell lost, one industry pundit declared today.

President and CEO of Canalys Steve Brazier, kicking off Acer's international press jamboree in Madrid this morning, said that any vendors contemplating a jump from a direct-only model into the channel could not expect a soft landing.

While Brazier did not refer to Dell by name, we can't think of any other struggling direct vendors who've suddenly seen the channel light.

Building up a channel strategy takes years, he said, with potential partners demanding consistency and transparency before they're prepared to give their trust to a vendor. At the same time the systems needed to supply and manage 30 key customers in a region are completely different to that needed to support tens of thousands of customers, he said.

The just-in-time production model Dell relies on has also turned into a liability, he said. In recent months component supplies have tightened. While Acer has let its inventory drift up from 20 days to 30 in recent months, giving it a cushion in a tightening market, Dell has found itself wrong-footed, with its much ballyhooed coloured notebook strategy looking more like Henry Ford's model T production line. More here on not so colourful laptops.

"The channel has beaten the direct model," he declared.

Brazier also poured scorn on telcos who are trying to pile into the PC channel. He said mobile phone outlets trying to push laptops alongside PCs were onto a loser, as their young, barely-trained staff could hardly manage a tariff sale, never mind a relatively complex piece of IT kit.

At the same time, in the cut-throat PC industry companies need to be ruthlessly efficient and, as Brazier bluntly put it, "telcos aren't".

Taking a broader view of the industry, Brazier said the industry was set for one of its best years ever.

The third quarter was shaping up to be one of the industry's best this millennium, he said. He then struck a dark note, pointing out: "If a company is struggling right now, it's their fault." ®


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