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PC Giant Dell Calls on Partners to Sell Much More

Craig GalbraithTECH DATA CHANNEL LINK — “We’re not your father’s Dell. We started as a PC company and have really expanded the capabilities of the company.”

Cheryl Cook, vice president of global channels and alliances with Dell, drove that point home Thursday during a keynote at Tech Data Channel Link in Grapevine, Texas.

As with other traditional hardware sellers, the PC giant is making a serious run in areas such as hybrid cloud, software and connected devices. Keeping up with technology changes, particularly those in the data center, is a critical piece of Dell’s business.

Cook told the roughly 500 partners in attendance that they need to spread their wings, citing a question that many customers are asking.

“With mobility and data and all the trends today, how do you respond to the line of business so they can deliver outcomes faster rather than just infrastructure? Customers increasingly want to have conversations around business outcomes and workloads.”

For example, she said, there is tremendous momentum building for virtual desktops. “How do we integrate from an end-to-end perspective and deliver architectures that span the continuum?” Cook posed, emphasizing her company’s strength in delivering services in such a manner.

Dell’s partner program is in its eighth year, with the company now deriving 40 percent of its global revenue from channel sales.

“People ask me, ‘How big is it going to grow?’” Cook said. “I wouldn’t put a cap on it. If the mix of our business continues to grow in the enterprise as it has, then it will continue to increase.”

A large percentage of global IT sales are done through channel partners — as much as 70 percent, noted Frank Vitagliano, Dell’s vice president of channel strategy and programs, in a sit-down interview with Channel Partners at Channel Link. Of that, two-thirds are done through technology distributors. That’s why Dell’s relationship with Tech Data is so valuable.

“If you’re not working with distributors, you’re eliminating two-thirds of the partner base. It’s too big of an opportunity, a market, for us not to be present.”

Cook pledged a focus on enablement and a simple channel-program structure to partners who want to work with Dell. She said her company is different from its competitors due in part to the considerable investments it is making in the channel — including a 40 percent year-over-year increase in money put toward training, and a 60 percent spike in incentives over that same time period.

Dell claims 165,000 members in its partner program, with 4,300 at a preferred or premier level — growing in double digits annually. The company thinks that number has the potential …

… to grow even higher in the near future as some uncertainty in the industry shakes out. Vitagliano says solution providers are keeping a close eye on HP’s split into two business units – one focused on hardware, software and services; the other on PC and printing – and any channel impact that might have. Also of note are any waves stemming from IBM’s sale of its servers business to Lenovo.

Vitagliano says one focus of Dell’s channel this year is encouraging partners to find upsell opportunities with existing customers.

One of those opportunities might be a cloud offering. The company recently hired Jim Ganthier away from HP; he is Dell’s new vice president and general manager of Engineered Solutions and Cloud. Look for a number of cloud announcements to come out of the Dell World event this fall, Vitagliano said.

Approximately one-quarter of Dell’s partners are selling cloud services, and it might be more if it weren’t for the challenging shift to a recurring revenue model. But Vitagliano sees an opportunity for partners who want to continue with their core business and sell some cloud services at the same time — getting the best of both worlds.

“It’s becoming more clear how it’s playing out,” he said. “We’ve seen a lot of partners trying to figure out how to morph their business into a hybrid solution provider.”

Follow senior online managing editor Craig Galbraith on Twitter.


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