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Packard Bell gets direct

Packard Bell NEC will launch direct sales to business customers later this year, in an attempt to keep up with Dell, Gateway, and Micron.

Brooke Crothers Former CNET contributor
Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
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Brooke Crothers
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NEW YORK--Packard Bell NEC will launch direct sales to business customers later this year, in an attempt to keep up with the successful direct sales models of companies such as Dell Computer, Gateway 2000, and Micron.

With this announcement, the words spoken by Dell's CEO Michael Dell yesterday sound very prophetic: "Others will try to look like our [direct sales] model, [rather] than us looking like their model." Dell was speaking at the keynote address at PC Expo in New York.

The new sales model, dubbed NEC Now, will give business customers the option to buy directly from Packard Bell NEC. Customers can "integrate" direct purchases with service and support from resellers, to mitigate the disadvantages of the direct sales model.

Direct sales offer computers at a lower cost to the buyer, but some large companies still hesitate to buy direct since they cannot obtain the service and support that come from service-oriented resellers.

"We are offering our customers the best of both worlds--direct choice and reseller expertise on installation and support," said Luis F. Machuca, executive vice president of Packard Bell NEC, in a prepared statement.

Richard Zwetchkenbaum, an analyst with International Data Corporation (IDC), says the move by Packard Bell NEC isn't merely a copycat move. "This isn't black and white. They're not abandoning their resellers. It's a long-term strategy to enhance the relationship with their customers. All major players are trying to become more in tune with their customers, to deal directly with their customers, to be more proactive," he said.

NEC Packard Bell customers will be able to purchase NEC notebooks, servers, advanced desktops, and Net PC products, the company said. NEC Now is scheduled for launch early in the third quarter of 1997.

The program focuses primarily on small and medium-sized enterprises and Fortune 1000 companies, the company said. State, local, and federal government and education customers will also be targeted as customers.

Packard Bell NEC will partner with resellers to back up the direct sales strategy by offering a "combination of financial services and a broad menu of additional commercial services," according to the company. The sales force will also be doubled over the next few quarters, the company said.

Customer orders will be fulfilled directly from Packard Bell NEC's manufacturing site in Sacramento, California, and from Fife, Washington, where the company's notebook computer facility has build-to-order capabilities.

All of this is coming none too soon. Dell is riding a wave of explosive growth through its direct sales model and Gateway 2000 has grown into one of the top manufacturers of PCs in the world on the back of its direct sales strategy. Boise, Idaho-based Micron, recently a buyout target of Compaq, has also successfully implemented direct sales.