SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Dell Technologies Inc.
DELL 125.88-1.6%3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Geoff Nunn who wrote (38330)4/19/1998 11:15:00 AM
From: rudedog  Read Replies (1) of 176387
 
Geoff -
VAR is Value Added Reseller, typically a smaller shop which provides additional services (installation of third party software, etc.).
Your comments are exactly right IMO. From early in the company's history, price protection was a part of CPQ's overall scheme to use the channel to smooth out the demand curve which allowed the factory to work to an even build plan even when orders were not necessarily smooth. This used to work well and was one of the business models which fueled CPQ's spectacular growth in the early days, when CPQ was able to develop the most efficient manufacturing process in the PC industry. But as you say this practice is now causing many of CPQ's problems, especially since Dell's model seems to be about as efficient without the associated costs.
My understanding is that CPQ is moving away from that model now and will reduce or eliminate price protection by the end of 2nd quarter. They needed to get to a new factory forecast model (which they have done using SAP's ERP system) before they could go from 'build to forecast' to 'build to order' manufacturing. The new model should allow the end price to float more freely and save CPQ some 'insurance money', but puts more risk on the reseller, so CPQ has had to adjust carefully to avoid punishing the channel. Computer Reseller News, VAR Channel Magazine and others have discussed this change in CPQ's business model quite a bit in the last few months.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News