Dell Has Lost the Channel War

The channel wars are over and Dell has lost according to Steve Brazier, CEO of Canalys, who spoke in Madrid on Friday.

Thatis the interpretation by Channel Register on Friday since Dell wasnit actually mentioned by name in the talk.

Mr. Brazier, who kicked off Aceris press jamboree, said that "any vendors contemplating a jump from a direct-only model into the channel could not expect a soft landing." He pointed out that building up a channel strategy takes many years and close work with channel partners. The logistics required to support customers in the retail channel are completely alien to the direct sale model, especially with regard to inventory.

"The channel has beaten the direct model," Mr. Brazier declared. He explained how an 20-30 day inventory is required to smooth out the flow in a tightening PC market. Dellis just-in-time model was unfavorably compared to Henry Fordis model T production line and has "wrong-footed" them.

Acer recently agreed to buy Gateway and is one of Dellis biggest competitors. Dell has been having trouble lately with a partial transition to a channel model, perhaps inspired by Appleis success with their retail stores.