With its services business struggling to maintain growth rates and analysts calling for a better strategy to handle nagging customer support issues, Dell has pulled the plug on a deal meant to expand its reach in on-site IT services and support, according to an executive close to the discussions.

The proposed alliance with Reliable IT, an online service that dispatches field technicians nationwide, would have seen the operation become an official extension of Dell's service and support operations, said Scott Shaul, president and CEO of Reliable IT, Springfield, Va.

The original talks were between Dell, Reliable IT and ServicePower, a field logistics automation company in Louisville, Ky., that optimizes the scheduling and deployment of field service calls, he said.

"Unfortunately, we didn't land that book of business," Shaul told CRN last week. Several sources said Dell's decision to end the negotiations could be a classic case of Dell squeezing yet another supplier. Shaul declined to speculate on reasons the deal failed to move forward. Dell declined comment.

To create and manage its footprint of available field technicians, Reliable IT partners with online IT services dispatcher OnForce, New York, which has more than 10,000 nationwide IT service providers on call. Many of those technicians possess more Dell certifications than certifications from any other vendor, according to a published list of OnForce's national hardware providers.

At roughly the same time that Reliable IT's talks with Dell were in earnest in April, the pace of Dell field services and warranty work running through OnForce accelerated, according to an OnForce service provider. But lately, OnForce work orders for Dell products have slowed dramatically, the service provider said.

Efforts by Dell to remediate service calls remotely could be contributing to the decline. In June, the vendor began offering free online support via DellConnect, in which Dell call-center employees use PC remote control applications to diagnose and repair problems.

Dell has fortified call-center services efforts like DellConnect in a major way, according to the Round Rock, Texas, vendor.

During Dell's second-quarter earnings call Aug. 17, the PC maker explained the conversion of temporary and outsourced workers to Dell-badged employees added about 6,000 to the employee head count in three months alone. Those freshly minted employees were mostly all inside technical support personnel, not field services, a Dell spokesman said.

The bottom line is that Dell's services business has not grown to the size company executives predicted after Chairman Michael Dell publicly projected the unit would eventually produce $10 billion a year. By the end of its most recent fiscal year, Dell service revenue reached $4.9 billion.