Should MSP’s fear large retailers entering their space?

So I always tell our Partners that are worried about the 800lb gorillas stealing their clients that the key to keeping them is their relationships with their clients. I’m confident that Microsoft, Dell, Ingram, Best Buy, Staples, Circut City, etc. would never be able to replace our relationship with our clients.

Well, Dell is stepping up their efforts. My friend Arlin Sorensen just sent me a telling CMP article chronicling Dell’s latest move in alienating the channel:

Dell Launches Mega-Bundle, But Cuts Out Channel

By Edward F. Moltzen, CMP Channel
4:21 PM EDT Wed. Oct. 10, 2007

Click here to recommend this article. What’s this?

Dell is launching a new top-to-bottom bundle that includes desktops, servers, networking and service, but will only sell it directly — even as the company is working behind the scenes to hash out details on its forthcoming formal channel program.

The Round Rock, Texas-based company is cutting the channel out of its On-Demand Desktop Streaming solution. The offering, announced Wednesday, is a bundle that includes diskless OptiPlex desktops, a PowerEdge 2950 server, a PowerConnect Gigabit switch, Citrix Provisioning Server for Desktops Software, and a PowerEdge 2900 storage server.

The new solution is part of Dell’s continuing initiative to streamline information technology products, the company said. During a press conference, though, Dell Senior Vice President Jeff Clarke said the product would not be available through the channel.

"This is going to be sold with our direct sales force, our direct service force," Clarke said. The offering is aimed at what the company describes as IT simplification, and allows for system images to be deployed, managed and refreshed across many desktops, remotely. The company says 100 clients can be managed across a single server.

"This is an evolution of Dell from being a hardware provider to being a solution provider," Clarke said.

Dell said the offering allows for software, applications and data to be streamed across a network to desk-based workers, and that it believes it can lower IT labor costs by as much as 56 percent.

The announcement and Clarke’s remarks came on the same day when Dell Chairman and CEO Michael Dell appeared at the Gartner IT Symposium in Orlando, Fla., to be peppered with questions about Dell’s channel strategy. To some in the channel, where skepticism about Dell’s channel plans have run high, the move does not appear to be one that will change the mood.

"If you called me a month ago, I might have told you I felt differently, that they were truly committed to a channel, but it’s just another day in the park with Dell," said John Riesenburger, chief operating officer of Vertical IT Solutions, a Tampa, Fla.-based solution provider and Dell reseller. "There is no channel program and they really need to not be saying they have that."

Riesenburger said the new Dell offering sounds like a move back to the mainframe model, "going back to centralized processing.

"If it pulls it off and it comes to fruition, it sounds like a pretty interesting initiative," Riesenburger said. He added, "Dell can’t do anything from a service delivery standpoint. That’s the good news."

Dell executives have said the company plans to roll out details of a new channel program by year’s end, including deal registration and solution provider incentives. The company is in the midst of an overhaul of its business strategy after two years of under-pressure sales and profits and after losing the worldwide market share lead in PCs to Dell.

While my position regarding client relationships is still key to maintaning and growing any  business partnership, it’s also become increasingly more important for us as MSPs to remain vigilant of the 800lb gorillas…

Erick Simpson

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1 Comment

  1. Stuart Crawford October 14, 2007

    Hi Erick
    I have to agree with your comments about taking care of our clients, this is the only proven method that will keep solutions providers in touch with their clients. Going to the extra level of service, getting back to all of their requests and going the extra mile. Let the 800 lb gorilla have the customers, we as solution providers want clients.
    Our partners need to focus on taking care of their clients and not what others are doing. If you don’t take care of your clients it doesn’t matter who knocks on the door of your client, DELL or the other IT shop down the street, you will lose that client.
    Stuart Crawford