Dell partners Datacare, Kay Kay Overseas in the West

Pune

April 1, 2008

Though Dell India prefers to remain silent about taking the channel route to
expand in India, fact is that it has gone on a signing spree with partners
across the country. The latest to join the vendor's channel network are Datacare
Corp in Pune and Kay Kay Overseas in Mumbai. Datacare will be handling the
entire upcountry region, except Mumbai.

Anil Mhaske, CEO, Datacare Corp said, "We have started stocking Dell
laptops and will aggressively sell it. We have informed our channel in
Maharashtra about this tie-up and they have shown keen interest in selling Dell
products."

Initially, Dell will maintain a light stock-and-sell model with these
partners, who are known as main sales affiliate (MSA). Over time the vendor
might increase the inventory it will stock with these partners. Also, these
dealers have been asked to furnish a bank guarantee, which will enable them to
buy a higher load of inventory. The partners would deal only in Dell laptops and
desktops, while the vendor itself would handle server sales.

At the same time, Dell will not stop its direct business. Instead, a Dell
official said that the company would continue its online business model, which
was created to offer customized products to customers. However, since this
business model did not take off very well in India, the company was compelled to
think of an alternate medium to cater to the burgeoning SMB market in the
country.

"We have realized that India is a different market and customers here
are not very comfortable buying online. We expect that the channel model will
help us double our business share in the country," added the official.

Under the new channel model, Dell will sign up exclusive partners in various
strategic markets. All business will be routed through these dealers for the
territories they cater to. Currently, the company is working closely with these
partners; imparting training to the latter's technical and sales teams.

The mode for payment has also been structured keeping the channel welfare in
mind. Customers will make payments in favor of Dell and the vendor will then
transfer the assured margins to partners. This will limit the credit exposure of
its partners.

The one issue that has been bothering a lot of these newly appointed partners
in the country is Dell's service strategy. Currently, the first level of service
is offered over a toll-free number. For unresolved cases, a Dell technician
offers onsite within two working days. This service support policy will continue
even when the channel is in place. The company is also mulling setting up
service centers in the country, but no deadlines have been set yet.