Taking Advantage of Aggressive Discounting by Dell

December, 2006

As a result of problems with customer service and product reliability, Dell has been losing market share over the past few years. Dell appears to be on the road to regain that lost market share with aggressive discounting for both businesses and consumers. You may have recently received discount offers in the mail for all sorts of Dell products–from desktops, laptops, servers, software, and peripherals to restaurant and retail point-of-sale equipment. To see all kinds of discounts currently offered by Dell, simply type “Dell discounts” into any search engine, such as Google, and you’ll find pages of discount coupons.

To date, Dell has been out-discounting HP and IBM in its attempt to recover market share. In the business sector, we find Dell is offering:

  • Desktops: discounts up to 50% for large Fortune 500 clients
  • Laptops: discounts up to 40%
  • Servers: discounts up to 35%

The actual discount offered will depend on the deal, the competition, whether Dell is already in the account, and how badly Dell wants the business. 

Will Dell’s deep discounts help it recover from its loss of market share over the years? Much of that may hinge on whether buyers feel confident that Dell has adequately addressed its customer service and reliability issues. While they are tackling these issues, even Dell admits that it will be some time before it has completely fixed the problems–especially with its customer service system. Time will tell, but either way, Dell’s aggressive discounting practices can score a big win for the buyer.

Computer Economics recommends that equipment buyers include Dell as a bidder whenever appropriate in order to increase price competition among vendors. Even if Dell is not the preferred supplier, its presence in the bidding will likely motivate other suppliers to compete more aggressively on price.

December 2006

For market intelligence on current vendor discounting levels for a wide variety of technologies, see our current Marketplace Reports research section.