Compaq Picks A Fight With Dell In Britain
(03/25/99, 3:50 p.m. ET)
By Madeleine Acey, TechWeb
LONDON -- Compaq U.K. issued a statement Thursday saying its rival Dell is not adhering to its direct-selling policy and has instead been courting British resellers.
Compaq also called a news conference, saying Joe McNally, the company's U.K and Ireland managing director, would "expose" Dell and ask it to "come clean about its business practices."
In a written statement Compaq said: "Michael Dell and colleagues have been contacting the principals of Britain's major resellers. Dell has not only asked them to sell Dell equipment, but also to provide much-needed computer support services for Dell boxes."
Compaq representatives and some channel partners, without Joe McNally present, proceeded to attack Dell. McNally appeared briefly by video.
The subheading on Compaq's news release was: "Compaq today fired the first salvo in a new U.K. computer war with Dell."
Asked to name these resellers, Compaq marketing director Vesey Crichton turned to reseller Bill Joss of Compel. Joss said a company owned by Compel, Infoproducts, bought equipment from Dell.
"It is a myth that Dell does not work with the channel," Joss said, adding it was "generally understood" that Dell does approach resellers.
Compaq channel sales director Nick Offin said: "While they claim to be direct, in reality, they are anything but. Why have Dell been actively trying to recruit channel partners in the U.K.?"
Asked if this was another case of "mud-slinging" -- as Gartner Group labeled a Compaq anti-Toshiba campaign last year -- Crichton astonished his audience and said it was "just a bit of fun."
Dell's vice president for the United Kingdom and Ireland, Brian McBride, said he was staggered by the outburst and called the written statement "factually incorrect."
"I'm not going to waste time and money taking them to court. We haven't contacted major resellers," he said. "We are contacting no resellers today."
Of Infoproducts he said: "I've never heard of them in my life."
"But resellers are contacting us. Hardware margins are being squeezed. Dell is going to be 25 per cent of the market," said McBride. "If a customer asks, 'Will you do it through this reseller?'-- we will."
McBride said 95 percent of Dell's business is direct. "It's been so successful, why would we want to change it?" he said.
McBride said Dell was No. 2 and closing in on Compaq in the U.K. market. He described Compaq as "clearly worried" and its campaign as "school bully cage-rattling
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