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The channel is really big business

Channel revenues at Dell have gained the attention of quite a few industry watchers, Billy MacInnes included

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It really is amazing to consider how large Dell’s channel business has become since the company formally announced its Dell PartnerDirect programme in December 2007, especially when you consider that the vendor had spent years denigrating resellers as part of its direct sales crusade before its sudden conversion.

When you take Dell’s history into account, it is nothing short of incredible that the vendor’s indirect sales operation has grown to become a $49bn business in just 11 years, although the acquisition of EMC in 2016 has obviously played a significant part in that growth.

Speaking earlier this month, Joyce Mullen, president global channel, OEM and IoT at Dell confirmed that partner revenue had increased 16% to $49bn in 2018, taking it very close to the $50bn target she set in February 2018 .

“Over the past 12 months the Dell Technologies global channel has delivered over $49bn in orders,” she said, “that means you have grown our businesses with us by $6bn. Remember that $50bn goal I talked about last year, we are so close and that kind of growth is just outstanding.”

Mullen indicated that Dell was not resting on its laurels in terms of how much business it expects to achieve through partners. “Onward to $70bn, there is nothing stopping us,” she exclaimed.

To appreciate the scale of Dell’s channel sales, Marius Haas, president and chief commercial officer at Dell noted that the partner business would qualify as a Fortune 60 company with revenues “bigger than Facebook, American Express, Oracle and Cisco”. To be scrupulously fair, the inclusion of Cisco could be slightly contentious as it reported revenues of $49.3bn for fiscal 2018.

In any case, it might make it easier for people to grasp the size of the business by comparing it to more familiar names. For example, Nike’s revenues for fiscal 2018 were $36.4bn, Warner Music Group (which includes Ed Sheeran, Cardi B and Bruno Mars among its artists) had sales of just over $4bn and Netflix reported turnover of $16bn. If that doesn’t impress them, how about this: Dell’s channel business in 2018 is equivalent to 82% of Disney’s $59.4bn revenues for 2018. And as everyone knows, Disney is not a Mickey Mouse outfit.

While it’s hard to predict future growth for the next few years, it’s worth noting that if Dell did manage to maintain a consistent 16% annual growth in indirect sales, the vendor would surpass the $70bn target set by Mullen within three years. Even if the company’s indirect sales momentum slipped to 10% per annum, the $70bn figure would be broken within four years.

Barring the effect of unforeseen negative economic factors, there’s no doubt it’s achievable and, if everything goes to plan, the revenues could be delivered in less than 15 years. Which just goes to show that the channel is big business. Really big business.

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