Dell Channel Business: Growing Twice the Industry Average?

Written by The VAR Guy 1
May 21, 2010

Even as Wall Street expresses concern about Dell's margins, Dell Channel Chief Greg Davis is crowing about several PartnerDirect partner program milestones. To wit, Dell's U.S. channel business is growing at twice the industry rate, and U.S. partners now register roughly 1,200 deals per week with Dell, Davis says. So what's next? Here are some clues from Davis.

Even as Wall Street expresses concern about Dell’s margins, Dell Channel Chief Greg Davis is crowing about several PartnerDirect partner program milestones. To wit, Dell’s U.S. channel business is growing at twice the industry rate, and U.S. partners now register roughly 1,200 deals per week with Dell, Davis says. So what’s next? Here are some clues from Davis.

First, a look at the big picture: For its Q1 2011, Dell’s revenue surged 21 percent to $14.9 billion. Servers, storage and services revenue grew a combined 38 percent, reaching $4.2 billion. But Wall Street investors expressed concern about Dell’s outlook and the company’s profit margins; Dell shares are down about 6 percent today (as of 2:00 p.m. eastern on May 21, 2010).

Milestones Worth Noting

Still, Davis and Dell Worldwide Channel Marketing Director Paul Shaffer point to multiple milestones within Dell’s channel strategy. And it’s hard to argue with some of the stats that Davis and Shaffer shared. They include:

Year-over-year global registrations grew roughly 100 percent in the quarter.
Partners registered roughly 11,000 deals per quarter in the U.S. and Europe.
Dell approves roughly 65 to 75 percent of the deals that partners register; for certified partners, the figure climbs to approximately 81%.
Dell on May 24 will lower its deal registration threshold to $25,000 for enterprise products in the public space. The previous threshold was $50,000.

Bottom line, Davis says: “We’re experiencing two times the market growth in our channel business. By any measure that means we’re winning with partners.”

Impressive. But The VAR Guy also has to put that claim in proper context. Since Dell has had a smaller partner revenue stream than rivals like HP, it’s easier for Dell to show rapid percentage growth figures.

Also, it sounds like Dell’s channel business involves classic server and storage integration opportunities — rather than next generation managed services efforts. During the discussion, Davis conceded that Dell’s managed services play continues to see “small momentum” with partners. More details over on MSPmentor, The VAR Guy’s sister site, soon.

Next Moves

Looking ahead, Davis says Dell has three priorities:

Continue to grow the enterprise and EqualLogic storage business through certified partners — including more partner recruitment.
Expand specializations, including a new KACE systems management specialization.
Expand and build out channel teams and programs in Asia-Pacific and Japan.

Also, Dell will hit the road. Shaffer says the company is planning regional partner conferences starting in August 2010. There’s even chatter about a potential annual partner conference in 2011 or so. The VAR Guy will be watching — and perhaps even attending, digging for more channel news.

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