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Dell channel revenues set to expand further post EMC deal

Michael Dell has restated that there is no limit to the levels of revenues that can come through partners as it gets ready to add more to the fold with the EMC acquisition

Michael Dell has restated that there is no limit to the amount of revenue that the firm will generate through the channel underlining just how far the former direct player has traveled since it embraced partners eight years ago.

He has made comments before about being open minded about the levels of revenue that come via partners and reaffirmed the ‘no limit’ stance in a Q&A session at the vendor's partner conference in Vienna at a time when the channel is driving more than 50% of the business in Emea and over 70% in the enterprise market.

Recent moves to extend the distribution line-up in the UK with Tech Data being added along with Exerts to support its retail push should increase the penetration resellers have selling Dell into the SME market.

“We don’t put a limit on what it can grow to. In Europe our enterprise business is 70%,” he said that it had strongly grown the channel business over the past few years and those revenues were going to increase following the addition of the EMC and VMware partners. “As we build more solutions partners have become incredibly important in terms of delivering those solutions to a wide set of customers.”

“Our channel revenues have been growing. The combination of EMC and VMware it will only grow more because of the types of solutions we will have,” he added that as a public listed company the VMware channel would continue to operate as it did currently.

Dell said that it now worked with all the major names in the channel and had very strong relationships with UK resellers and felt that it was now trusted by partners. He highlighted CDW as the one name that had been missing until recently but it extended its relationship with that business across the US and Canada.

He added that it going private had paid off for the business and it had been able to register 11 quarters of growth in the PC business and had continued to improve its position in the global server market. He added that the recently announced acquisition of EMC, which includes having control of VMware, would further accelerate its ability to cover all the bases.

“If you think about the four big pillars of the IT of today you have servers, storage, virtualisation and PCs and our new company will be absolutely a leader in all four of those key parts of the IT of today. In addition our company will be a leader in the IT of tomorrow, which we think of as the third platform. A lot of our customers are thinking about digital transformation, the software defined datacentre, converged infrastructure, hybrid cloud, mobile and security. We do all of this with a company with unmatched reach,” he said.

He said that it was serious about the PC business and had delivered the strongest performance in that sector since the 1990s and it had pledged to increase its activity under private ownership and it remained committed to that area.

Future direction

When it came to providing some guidance over where he feels the channel should be heading the talk was less about the technology of today but some of the emerging areas that formed his IT of tomorrow list.

“The successful channel companies that have evolved into leaders today are the ones that have understood that the world keeps changing and value add has to keep changing. The IT of tomorrow areas are those areas where channel partners are going to have to focus their attention. Things like the hybrid cloud is where we see a lot of smart channel partners doing in very strongly. Security is another. If you go into a customer today and don’t have a security strategy then they probably don’t even want to talk to you because cyber threats are so significant and evolving so rapidly,” he added.

He said mobility along with software defined data centres and hyper converged solutions were other areas that some of the partners were starting to look into. “Probably most importantly is this whole digital transformation, with products and services becoming digital. How do you help your customers enter that world and begin to have data to make better decisions.”

Dell has lots of IoT projects in the works and some partners are participating in getting some of those to market but Dell said that it was early days for a lot of the digital transformation process and there was plenty of more things that would be done by itself as well as the channel.

“Value add has to shift. Our industry has always been an innovate or die, a change or die business and we are obviously leaning very heavily into innovation with the combination of Dell, EMC and VMware,” said Dell.

The other phrase that has always been associated with the industry is “get big, get niche or get out”. At a time when HP and Symantec have decided that getting more focus is the best option Dell clearly believes that size still matters.

“Everybody is entitled to their own opinion of how to run their business. I believe that converged infrastructure is real and that innovation is important and I believe scale matters. We have seen that customer like to buy certain things together,” he added “We have never been a company that has said we feel bad because we are not doing it the way someone else is doing it and we are happy to take our own path.”​

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