Since the founding of Dell Inc. back in 1984, the company and its founder Michael Dell have pioneered the direct sales model, selling directly to customers and skipping the sales channel. The model was once a revolution, one that helped the company lead the PC sales industry for some years, until recently Dell watched its share of global PC sales fall behind HP's in the second half of 2006.
Besides losing both revenue and market share, Dell also went through a rough year with former CEO Kevin Rollins resigning from the company, an accounting investigation by stock market regulators and multiple lawsuits. Now with Michael Dell back as CEO, the company is moving forward with plans to begin selling PCs through solution providers, channel partners and retail partners.
Michael Dell first hinted at the move in a memo to his employees in April, just three months after he resumed the title of chief executive in an attempt to save the company from sinking sales.
"The direct model was a revolution. It's not a religion," Dell said in the memo. This week the company fleshed out the plan, saying it would create a more definitive program for solution partners, perhaps by creating an authorized logo they could use to leverage greater sales, according to Dell spokesman Dwayne Cox.
The company already has kiosks in shopping centers across the U.S. and Canada promoting their products, bringing a good amount of business and awareness of the company for online sales, and is selling about $4 billion a year through its solution partners in North America alone. However as Dell targets a broader market they need to partner with large scale retailers in an effort to regain the lead in the PC sales business.