Dell recently announced it would definitely be forming sales partnerships with solution providers as well as with channel partners and retail partners.  Previous plans were to stay with a direct sales model.

This plan to work with solution providers will alter the industry as Dell begins to sell PCs in the same marketplace as competitors including Hewlett Packard, Lenovo and Acer.  Dell will continue direct sales, but will attempt to grow its business through solution providers and in retail outlets throughout the world.  This statement came from Lionel Menchaca, manager of digital media for Dell.  

Dell already sells $4 billion of computers through solution providers annually in North America, so this model is not entirely new.  Even though the company’s sales were down in 2006, the company still shipped 39 million PCs last year, which was 16.3 percent of the computer business market.  

Investors are concerned with this new model to form partnerships with solution providers.  But analysts are stating that Dell’s decision will be a good idea to help it survive in a changing marketplace.  While Dell’s direct sales model was a benefit in the 1980’s, now it is a disadvantage that keeps the company out of the running in international markets.

Michael Dell suggested this move towards solution providers in April, three months after he took over the chief executive title to save the company.  He claims the direct sales model was never meant to be religiously followed, rather it was meant as a way to distinguish the company.  

Last week, Dell formalized the new solution providers plan and stated it would also be creating a structured partner plan for solution providers and that it would be also creating a special logo for solution providers to use to help with sales.

Blogged By:  Computer Consulting Kit