Anyone who has been following PC manufacturer Dell Inc. knows that the company has been in the throes of a massive software and services transformation for the better part of two to three years.
This week, Dell had its coming out party.
At Hotel Monaco near San Francisco’s Union Square, Dell made it be known that it intends, in no uncertain terms, to stay the course on its transition as a software and services company.
The company already has a strong start. Thus far, Dell’s software division has resides at $1.5 billion and is on an upwards trajectory.
“Competitors have a dilemma. They have legacy profit pools. We don’t have any legacy profit pools to protect,” said John Swainson, Dell’s software group president, during a keynote Wednesday. “We have a lot of assets to bring to the table and we’re working hard to bring a whole lot more.”
As perhaps expected, Dell’s celebrated its reincarnation with a slew product launches – all of which fit in strategically in the Round Rock, Tex.-based company’s refreshed end-to-end strategy, under the auspices of its enterprise software division. Among its myriad releases, Dell announced the release of its new optimization and productivity platform ProSupport Suite, a new version of its TOAD Business Intelligence Suite, and refreshed portfolio of mobility releases.
Naturally, propelling the company’s transformation going forward will be a reinvigorated focus on weaving all those products into end-to-end solutions.
And underpinning that effort? To that end, Dell launched a restructured PartnerDirect partner program, a move which unites the entirety of its current and acquired programs and solution providers, and aligns structure with the sale of end-to-end solutions.
Under the new program, Dell Software partners will be tapped to adhere to new specific requirements within PartnerDirect to achieve certifications — which also reflect similar directives for hardware-focused Preferred and Premier Partners.
But some of the biggest value for partners will be in the revamped program’s ability to provide a greater range of specialized and integrated solutions to customers. To that end, the comprehensive program caters to both hardware and software sales, while clearing a path for partners who want to offer a combination of both.
Essentially, the program provides tools for partners who want to hone their efforts into a single line of business, executed via a Premier status with an advanced competency achievement. In the same vein, service provider partners will also be required to comply with new requirments in a revamped program better tailored to their specific business model.
In a letter to its redefined PatnerDirect channel, Greg Davis, Dell vice president and general manager, global commercial channels, told partners that it was rolling out pass-through of price programs. Among other things the programs are focused intently on replacing competing server products with list price discounts, zero percent financing for a specified number of months, and buy-back programs, as well as POCs and seed systems for customers migrating their business to Dell’s solutions, while entailing sales materials and support.
“So, while others attempt to stay competitive with negative messaging, at Dell we will continue to invest our energy and funds into PartnerDirect programs and channel leadership to work with you, our partners, and deliver long-term, end-to-end solutions that will power our customers’ businesses,” Davis said in the letter.
Over the next several months, channel partners from Dell’s acquired software companies will transition to the PartnerDirect program. Dell added that it planned to debut four new software-related competencies in the areas of security, systems management, data protection and information management, in the fall as channel integrations unfoled and the program evolves.
Indeed, the program revamp indicates another significant step in Dell’s channel evolution, which arguably began five years ago as the firm overhauled its go-to-market strategy with a renewed commitment to swell its partner ranks and enable them to bring more of its solutions to market.
Over the last five years, Dell’s has taken a trial by error approach but ultimately nurtured a thriving channel program that now consists of more than 20,000 partners and represents about 35 percent of the entirety of its commercial revenue.
And while it’s no secret that Dell still has a robust direct business, Swainson said that Dell’s competitive advantage was that it had the ability to provide customer a wider and more flexible range of go-to-market choices.
“It’s the notion of going to market in a multichannel kind of way,” he said. “We touch customers the way they want to be touched.”
And Dell’s software overhaul will likely represent another turning point for its evolving channel. The latest effort got underway when Dell began its services overhaul more than two years ago, aggressively and strategically bulking its software and security prowess with companies such as SecureWorks, SonicWall, Quest Software, and AppAssure, among others, aimed at filling in critical pieces in an overarching software stack.
“We didn’t buy these businesses to harvest them, we bought them to grow them, and make this a base upon which to grow a software business of scale” Swainson said.
That said, each company came with their own channel programs and culture, prompting users to wait to see how the firm’s aquisition strategy would play out.
Now going forward, one of Dell’s biggest hurdles undoubtedly will be to make all of those moving parts sing harmoniously. Aligning channel program foundations will be fundamental for any anticipated product integrations and solution suites aimed at creating differentiation, expanding reach, increasing partner value, creating cross-sell and upsell opportunities and redefining its place in the market.
That said, it’s a move necessary for Dell to take on major competitors such as IBM, now leagues ahead of Round Rock in its software and services reinvention.
In short, it will be imperative for Dell’s ultimate transformation. That effort is now officially underway, and channel partners can start making plans.