Channeling Sales

In a much-rumored transaction, Dell finally absorbed niche PC OEM Alienware. Alienware was the real originator of the cool PC tend, with painted desktops, lights and whistles, strange mods and out of the world performance. Focusing on performance allowed Alienware to become one of the desktops of choice for the PC gaming community, and draw way more attention than its sales warranted as it catered to that highly publicized, much sought-after niche.

But selling out to Dell seems to be contrary to the maintenance of cool, hip and cutting edge company. Dell has always been the Borg, sucking up all the air in the PC market as it mechanically absorbed market share gain after market share gain in the past ten years. If there is any PC company that represents button-down corporate values and a military-like obsession with efficiency it is Dell. For Alienware to say they have a lot in common with Dell, as the CEO's statement claims, is an exercise in fooling oneself. Any company positioned as Alienware is can hardly claim to be the ruthless, take no prisoners, play to win type of company Dell is. We firmly believe that this is a mistake of the first order for Alienware and will open the market for serious high spending gamers to all the Alienware pretenders out there in the market.

And why would Dell do this if they can’t absorb Alienware and benefit from their cache? The sales volume and profit dollar that Alienware can add to Dell's business can hardly amount to more than a single reported Alien abduction since Roswell. And, without taking them over, they can hardly learn anything about managing a transaction business model, the lack of understanding of which has been the culprit behind Dell’s recent consumer market troubles as the efficiencies in the consumer market have turned away from direct and towards retail. It would be much better for Dell to buy Gateway and gain that transaction business model knowledge and Gateway's retail distribution channels. That would go a long way toward solving some of Dell’s consumer troubles. But, of course, after 13 years out of retail and a subsequent blazing trail of hate mail towards the channel, Dell is not likely to reverse course so abruptly.