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Distributors draw on lessons from the direct model to retool the IT supply chain
ABOUT THE SAME TIME DELL Computer Corp. started making inroads into the channel's market share, distributors and resellers realized they needed to make some changes.
Few would dispute the role the vendor had in spurring development of a more mature, efficient supply chain. The process toward an integrated distribution model became evident when distributors realized there had to be a fundamental shift in their business practices.
That shift began as Dell started winning share from the other major PC vendors, culminating with Compaq Computer Corp.'s recent decision to significantly scale back its ranks of authorized distributors.
"The turning point was the fact that buyers and the channel partners woke up to the fact that there is a different business model," said Tony Ibarguen, president of Tech Data Corp., Clearwater, Fla., referring to Dell's model of low price, quick turnaround and little service.
"Dell identified and sold to a group of end users who identified themselves as self integrators," Ibarguen said. "The channel assumption was that most users preferred to have help, that they traditionally wanted a service provider to do [service] for them."
Jim Illson, president of Merisel Inc., El Segundo, Calif., said Dell may have been one catalyst, but it was not the only reason for change. "I think this is more about what happens as an industry matures," he said. "As...