Alienware is an American computer hardware company and a wholly owned subsidiary of Dell, Inc. It mainly assembles third party components into desktops and laptops with custom enclosures for high-performance gaming. These products also support graphically intense applications such as video editing, simulation, and audio editing. Alienware also offers for sale rebadged computer peripherals, such as headsets, computer mouses, monitors and keyboards. Their hardware has distinctive "sci-fi" styling, typically including decorative lighting. Alienware was founded in 1996 by Nelson Gonzalez and Alex Aguila. Alienware's corporate headquarters is located in The Hammocks,unincorporated Miami-Dade County, Florida, near Miami. Established in 1996 by Nelson Gonzalez and Alex Aguila, Alienware assembles high end performance desktops, notebooks, and workstations. According to employees, the Alienware name was chosen because of the founders' fondness for the hit television series The X-Files, hence the theme to their products, with names such as Area-51, Hangar18, m15x, and Aurora.
Alienware was originally established to tap a niche in the high performance gaming market, which back then was not on the radar of the major PC manufacturers such as Dell. Since high-end hardware was not widely distributed, the company's founders formed an OEM which soldpersonal computers with the highest performing hardware and settings according to benchmarks[citation needed]. The company products are also differentiated by their science-fiction based designs.
Distribution strategy
Dell considered buying Alienware since 2002, but did not take any action until March 22, 2006, when it agreed to purchase the company.The new subsidiary maintained its autonomy in terms of design and marketing. However, Alienware's access to Dell's supply chain, purchasing power, and economies of scale would lower its operating costs.
Initially, Dell maintained its competing XPS line of gaming PCs, often selling computers with the same specifications. The XPS line may have hurt Alienware's market share within its high-end market segment. Due to corporate restructuring in the spring of 2008, the XPS brand was scaled down.[citation needed] Product development of gaming PCs was consolidated with Dell's gaming division, with Alienware becoming Dell's premier gaming brand. On June 2, 2009, The M17x was introduced as the First Alienware/Dell branded system. Alienware now represents the premium performance space in Dell’s consumer family of products. This launch also expands Alienware’s global reach from six to 45 countries.
On March 25, 2009, Alienware stated that it was considering closing its manufacturing bases in Athlone, County Westmeath, Ireland, and in Miami, Florida.
Alienware ranked as one of the fastest-growing private companies in the United States by 2005. Revenues reached $112 million in 2004 and leaped to $172 million in 2005, the year the company opened its first retail store in a Miami mall. Fueled by the ever increasing sales of its gaming equipment and new streams of revenue coming from corporate and government sales, the company's growth put Gonzalez and Aguila at a crossroads on the eve of their tenth anniversary. They needed capital to expand, which meant they needed either to take Alienware public to raise the necessary funds or sell the company to a larger rival. The founders opted for the latter in 2006, agreeing to sell their company to the largest computer manufacturer in the world, Dell, Inc.
So lets’ talk about the old way of distributing products and then Dell’s new Channel model as I see it and the advantages it offers to the entire marketplace.Most hardware and software companies sell their products indirectly to partners through distributors and this has been the primary distribution model for years. Manufacturers use distributors to get their products to market for these reasons:
They can’t scale product sales and fulfillment at the levels that distributors can provide. They don’t have a “direct-to-end user” model or the resources to sell directly to businesses. They cannot provide adequate technical support across domestic and international markets.
Distributors make their money by:
Slotting Fees - Charging “slotting fees” to the manufacturers (adding the products to the list and putting them on the shelves).
Mark-up - Obtaining pricing discounts from the manufacturers that enable them to mark-up the wholesale prices of the products (selling to partners)
Technical Support – Charging the manufacturers and/or partners to support their end-user customers.
Over the years distributors have added value “in the middle” but their value has been waning, and to some extent have become a liability to all parties. Distributors have been evolving more into “hubs” for manufacturers to sell to and partners to buy from and they stock thousands of different product types.
As the distributors have grown their business models have become too cumbersome and ineffective in serving each manufacturer, growing dis-proportionately in relation to the manufacturers, partners and end-users. Also market pricing seems to be affected negatively by the relationship of manufacturer with distribution hub. Thus partners and end-users have fewer options, higher prices and realize less value. Many of the products from the distributors are not “built-to-order”, are often older models and have been sitting for too long in a warehouse. The ability to return said products is also very restricted, not permitting the supply flexibility the market and end customer require.
Dell’s new and improved design for a channel distribution model, on the other hand, is completely different. Leveraging some of the principals of its original “direct-to-end user” model it has been shaping and executing a cleaner, smarter and better channel model that does not include the classic distributors, or the issues that distributors bring to the table. Dell’s “direct-to-partner” model enables end-users to choose how and from whom they obtain Dell products and services.
Allienware as part of its PartnerDirect program, new distribution agreements with Ingram Micro and Tech Data in the U.S. and Canada.
The two multi-year distribution agreements were forged as a result of listening to Dell's partner feedback. Partners wanted to have the choice of working with the Dell product line either directly with Dell, or through distribution, Davis said.
Currently, Allienware has over 35,000 registered partners in its PartnerDirect program in 148 countries. Davis said of those, about 17,000 are partners from the U.S. and Canada. In Canada specifically, Davis says PartnerDirect has just under 1,400 Canadian registered partners.
With the new distribution relationships, Davis says he is looking to double the number of Dell's certified partners this year.
Alienware was originally established to tap a niche in the high performance gaming market, which back then was not on the radar of the major PC manufacturers such as Dell. Since high-end hardware was not widely distributed, the company's founders formed an OEM which soldpersonal computers with the highest performing hardware and settings according to benchmarks[citation needed]. The company products are also differentiated by their science-fiction based designs.
Distribution strategy
Dell considered buying Alienware since 2002, but did not take any action until March 22, 2006, when it agreed to purchase the company.The new subsidiary maintained its autonomy in terms of design and marketing. However, Alienware's access to Dell's supply chain, purchasing power, and economies of scale would lower its operating costs.
Initially, Dell maintained its competing XPS line of gaming PCs, often selling computers with the same specifications. The XPS line may have hurt Alienware's market share within its high-end market segment. Due to corporate restructuring in the spring of 2008, the XPS brand was scaled down.[citation needed] Product development of gaming PCs was consolidated with Dell's gaming division, with Alienware becoming Dell's premier gaming brand. On June 2, 2009, The M17x was introduced as the First Alienware/Dell branded system. Alienware now represents the premium performance space in Dell’s consumer family of products. This launch also expands Alienware’s global reach from six to 45 countries.
On March 25, 2009, Alienware stated that it was considering closing its manufacturing bases in Athlone, County Westmeath, Ireland, and in Miami, Florida.
Alienware ranked as one of the fastest-growing private companies in the United States by 2005. Revenues reached $112 million in 2004 and leaped to $172 million in 2005, the year the company opened its first retail store in a Miami mall. Fueled by the ever increasing sales of its gaming equipment and new streams of revenue coming from corporate and government sales, the company's growth put Gonzalez and Aguila at a crossroads on the eve of their tenth anniversary. They needed capital to expand, which meant they needed either to take Alienware public to raise the necessary funds or sell the company to a larger rival. The founders opted for the latter in 2006, agreeing to sell their company to the largest computer manufacturer in the world, Dell, Inc.
So lets’ talk about the old way of distributing products and then Dell’s new Channel model as I see it and the advantages it offers to the entire marketplace.Most hardware and software companies sell their products indirectly to partners through distributors and this has been the primary distribution model for years. Manufacturers use distributors to get their products to market for these reasons:
They can’t scale product sales and fulfillment at the levels that distributors can provide. They don’t have a “direct-to-end user” model or the resources to sell directly to businesses. They cannot provide adequate technical support across domestic and international markets.
Distributors make their money by:
Slotting Fees - Charging “slotting fees” to the manufacturers (adding the products to the list and putting them on the shelves).
Mark-up - Obtaining pricing discounts from the manufacturers that enable them to mark-up the wholesale prices of the products (selling to partners)
Technical Support – Charging the manufacturers and/or partners to support their end-user customers.
Over the years distributors have added value “in the middle” but their value has been waning, and to some extent have become a liability to all parties. Distributors have been evolving more into “hubs” for manufacturers to sell to and partners to buy from and they stock thousands of different product types.
As the distributors have grown their business models have become too cumbersome and ineffective in serving each manufacturer, growing dis-proportionately in relation to the manufacturers, partners and end-users. Also market pricing seems to be affected negatively by the relationship of manufacturer with distribution hub. Thus partners and end-users have fewer options, higher prices and realize less value. Many of the products from the distributors are not “built-to-order”, are often older models and have been sitting for too long in a warehouse. The ability to return said products is also very restricted, not permitting the supply flexibility the market and end customer require.
Dell’s new and improved design for a channel distribution model, on the other hand, is completely different. Leveraging some of the principals of its original “direct-to-end user” model it has been shaping and executing a cleaner, smarter and better channel model that does not include the classic distributors, or the issues that distributors bring to the table. Dell’s “direct-to-partner” model enables end-users to choose how and from whom they obtain Dell products and services.
Allienware as part of its PartnerDirect program, new distribution agreements with Ingram Micro and Tech Data in the U.S. and Canada.
The two multi-year distribution agreements were forged as a result of listening to Dell's partner feedback. Partners wanted to have the choice of working with the Dell product line either directly with Dell, or through distribution, Davis said.
Currently, Allienware has over 35,000 registered partners in its PartnerDirect program in 148 countries. Davis said of those, about 17,000 are partners from the U.S. and Canada. In Canada specifically, Davis says PartnerDirect has just under 1,400 Canadian registered partners.
With the new distribution relationships, Davis says he is looking to double the number of Dell's certified partners this year.