Taking aim at Dell

Quietly creating a better PC. That’s the slogan on Seanix’s Web site. Right now, along with partner Tech Data, the two may be quietly creating an alliance against Dell.

It couldn’t come at a better time for resellers. The PC market continues to take a beating, with no sign of recovery – and

Dell has a strong grip on the market with its direct sales model.

According to IDC Canada, the Canadian PC market is continuing to decline, as PC shipments fell 4.1 per cent in the first quarter of this year compared to the same period last year.

Why? Project delays and budgetary constraints resulted in weak government and commercial PC demand, according to IDC.

But numbers were still lower than expected, possibly due to the effects of the war in Iraq and SARS – people had other things on their minds besides buying computers.

Even sales of notebooks failed to make up the difference, says IDC, remaining flat.

With slow sales, small margins and competition from direct vendors like Dell, resellers have found themselves in between a rock and a hard place.

Distributors, too, have struggled to compete in the low-end PC space, where Dell has a stronghold – leaving resellers frustrated, as they lose sales to competitors like Dell.

The direct vendor offers customized PCs in 96 hours, which has made it difficult for resellers to compete on medium and large RFPs.

Tech Data has responded by partnering with Seanix to allow its customers to configure customized desktop systems online – and deliver them within 96 hours.

This appears to be a direct attack on the direct model that has made Dell so successful; it allows resellers to compete in markets they weren’t able to before, and to compete more effectively against Dell.

The configure-to-order tool – available on Tech Data’s Web site – uses Seanix’s Web-based configurator and ordering technology. Authorized resellers can choose from six base models and add options based on their customers’ requirements.

As a vendor, Seanix doesn’t compete directly with resellers, but can still cut out some of the costs associated with the distribution channel.

The configure-to-order process takes advantage of immediate pricing, which directly benefits resellers. Also, they’re not locked into the Windows operating system, which means they can build Linux systems – cutting costs and potentially opening up new markets.

While Dell will likely remain a strong competitor for some time to come, this might – at the very least – put a chink in its armour, especially if other distributors get on board with similar initiatives.

This strategy won’t replace tier-one brands either – it isn’t meant to. It’s simply an alternative revenue stream that will appeal to some – but not all – resellers.

Ultimately, it’s up to the resellers themselves to use these CTO tools to their advantage. Tech Data and Seanix are providing the chisel, but resellers must shape their own opportunities. And quietly create more effective competition in the PC market.

In other news, Ingram Micro has created a dedicated Components Business Unit for resellers, system assemblers and system integrators.

IDC predicts the components market will increase at a compound annual growth rate of 15 per cent. To take advantage of this, Ingram says it will provide “”market knowledge, speed and value pricing”” to its resellers.

The distributor’s components team plans to offer demand-generation tools, volume pricing, reserve inventory and just-in-time logistics to resellers who build their own systems. It also plans to offer faster response times while delivering lower-cost products.</

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Jim Love, Chief Content Officer, IT World Canada

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Vawn Himmelsbach
Vawn Himmelsbach
Is a Toronto-based journalist and regular contributor to IT World Canada's publications.

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