Dell's Distribution Dilemma
Dell's entry into the channel could have greater implications for distributors and the vendor than they imagined.One of the thornier issues that the channel as a whole is going to have to come to terms with now that Dell has a formal channel program is the company's growing footprint as a distributor. Beyond selling millions of machines, Dell also resells, among other things, storage products from EMC; virtualization software from VMware and Virtual Iron; printers from Lexmark, Xerox and Samsung; and a raft of security products from multiple vendors. Because of Dell's size, it usually gets these products at a lower price than solution providers can get doing business directly with those manufacturers. So by doing business with Dell, it's theoretically possible for the solution provider to get a better deal from Dell than they would from either EMC or a distributor.
This potential price advantage is going to test a lot of the loyalties in the channel and may also pose a dilemma for any distributor thinking about adding Dell products to their line card. After all, if Dell is in the channel they are probably going to want to eventually take advantage of a distributor's ability to reach out to thousands of solution providers at a lower cost than Dell can do on its own.