When Dell, famed for bypassing the middleman, announced last week it would sell its own brand of printers supplied by Lexmark, eyebrows were raised in the channel. But Lexmark insists this won`t mean competition with its own indirect selling partners.
Lexmark country manager Hans Horn points to a deal of years gone by, whereby Dell sold Lexmark-branded printers, as well as output technology from HP. "For one reason or another, it stopped selling HP," he says, "but it continues selling Lexmark printers, now just under its own brand.
"Just as that deal was not an instance of disintermediation, so this deal isn`t disintermediation either."
He says Lexmark views Dell as another reseller/integrator, an additional and highly successful channel to market just like its other partners. "Our channel is crucial to Lexmark`s success. Nothing has changed in our go-to-market strategy."
Horn adds that, although the specifics of the deal cannot be discussed, Dell will not be given preferential pricing.
Local business partners may be forgiven for balking at sharing a partner network with Dell, which has made merry with the channel - claiming, most notably, lower costs of a direct delivery mechanism. But some commentators, including Lexmark, feel Dell is at basis an integrator, putting it squarely within the channel model, rather than a vendor/manufacturer, whether at the top of a distribution chain or selling direct.
No deal yet in SA
Dell SA marketing manager Leigh Hancock says he expects the deal will only become a local reality by the end of the year, or early next year. "Thus far, it has only been a US thing, and will be launched in Europe, the Middle East and Africa by the second half of this year," he says.
Horn concurs that South African resellers of Lexmark will only see competition from Dell, which prides itself on a total offering to the user, by late this year at the earliest.
Hancock says Dell has been very selective in its choice of printers from Lexmark. The range, which will be broadened in time, for the moment includes two lasers and one inkjet-based multifunctional, by Horn`s description representing entry-level and small and medium-sized business offerings.
Frank Cornelli, sales executive at TCM, a Lexmark reseller, questions whether the deal makes much sense for Dell. Its SA model, much the same as the US go-to-market model, is purely direct to companies that order large volumes of printers.
Cornelli points out that printers do not make vendors much money. Most of the total cost of ownership of a printer lies in services (maintenance, support and document management) and consumables. "Therefore, at the entry level, where one or two printers are ordered at a time, I don`t see how Dell can do this cost-effectively to themselves and the end-user.
"Just like consumers, companies often also order only a few replacement printers at a time, but at least the consumables bills amount to something," he says. "This would make it a valid prospect for Dell, unless it wants to change its SA model to one where a channel fulfils the many smaller deals it will attract."
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