Cisco has ended Dell's authorisation as a reseller of its networking equipment in the US, but European resellers will still face competition from the direct selling vendor as it prepares to launch its own range.
"Effective 27 September, Dell will no longer be a Cisco authorised reseller," the firm said in a statement. It declined to comment further.
The move follows a similar decision by Hewlett Packard (HP) to stop building printers for the direct-selling Dell because it intended to manufacture competing products to HP's own line.
Dell's networking products are not yet available in Europe but market watchers expect the firm to make a move soon. Keith Humphreys, an analyst at EuroLAN Research, predicted a UK launch before the end of the year.
Cisco chief executive John Chambers warned in August that competition from next-generation players such as Dell would be fierce. Dell has shipped a million ports of its PowerConnect local area network switch in the US in just a year.
Experts believe that Cisco's decision has been triggered by Dell's planned expansion of its own networking products, and that Dell doesn't fit in with Cisco's value-added channel model.
In the US Dell buys networking equipment direct from tier one vendors such as Cisco, Nortel, Extreme Enterasys, but in Europe it buys through Ingram Micro.
A Dell spokeswoman said that the company will continue to buy networking products from Ingram Micro in Europe which could potentially include Cisco equipment.
George Sanger, sales and marketing director at Cisco reseller Xpert Systems, explained that Cisco's decision "will remove a big competitor for the whole reseller channel because when we are up against Dell it would price us out of the market. That is its strength because it's a massive organisation whereas our strength is value add."
Any move to reduce Dell's capabilities in the networking arena is good for resellers.
Peter Finter, director of channel strategy and support, EMEA, at Nortel, said that the vendor will continue its relationship with Dell because it will not conflict with its partners.
"Dell is complementary to our channel as it targets the low end of the SME market and most of our resellers sell in the mid market," he said. "It's very interesting that Cisco sees Dell as an alternative to its products."
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