Dell (DELL): Another Partnership

Dell (DELL) has moved to sell its PCs through retail outlets like Wal-Mart (WMT) Now, it wants to help retailers run their businesses.

The computer company has married itself up with the world’s largest enterprise software company, SAP (SAP) to offer large retail companies a system to operate more efficiently. Reuters reports that "SAP software will be installed on Dell point-of-sale systems and servers, allowing retailers to better track customer behavior and buying trends."

The idea behind the alliance is that retailers do not have to buy software and hardware separately.

But, many retailers probably have IT departments that would rather make integration decisions themselves, so the product will have to be priced low. And, it may not be able to compete with companies like Oracle (ORCL) which offer they software independent of hardware platform. Dell may feel that if it teams up with an SAP competitor for some retail sales that the partnership could be threatened.

The new deal limits Dell and that may not be a good thing.

Douglas A. McIntyre