Dell’s channel business did very well in the first quarter of their new year. At this stage though, there is still no definite clarity on the channel implications of assets entering Dell – and exiting it, with the SonicWALL divestiture.
Dell channel chief Cheryl Cook
While the key topic of concern around Dell’s channel business these days is what it will look like in several months time, the core ‘legacy’ channel business certainly started off its 2017 fiscal year with a bang.
“We are excited about the current course and speed of our classic traditional business and are focused on keeping that on course as we move toward integration with EMC,” said Dell channel chief Cheryl Cook. “Our first quarter finished very strong, with revenue outpacing the market at three times the market rate. We saw good double digit growth in a lot of our top partners in North America. That extended across types all partner types, including large national partners, but also our regional and SMB partners as well.”
Cook has always placed a high value on metrics which indicate increased partner engagement, and those metrics were good in the first quarter.
“We see deal registration as a proxy for activity levels and engagement, so attach considerable importance to it,” Cook said. “U.S. registrations were up 40 per cent year over year, for a total of 43,000, which is a new record.” Global numbers were strong, but not to the same degree, with a 20 per cent increase and 120,000 registrations compared to the year-ago quarter.
Rebate incentives, another key measure of engagement, were also up significantly, 48 per cent overall.
“These continue to go up at a high rate,” Cook said. “We launched in Q1 new incentive structures announced at Dell World. Client rebates were up 96 per cent year over year, and identity and access management rebates were up 150 per cent.”
One of these new programs was the New Business Incentives (NBI) program.
“This was designed to get us into new customers, and in its first quarter we saw a very strong response,” Cook said. “For the first quarter, of more than 2000 North American Premier and Preferred partners, 1100 received NBI incentives. That led to a 25 per cent revenue growth from new business.”
Cook said the continued focus on competencies and training saw the launch of several new competencies, including VDI environments.
“Our top 100 partners in North America who invested in competency training few at a 33 per cent rate over the year,” Cook said. “Core client solutions training was up 37 per cent, and in workstations was up 30 per cent. In the new cloud client computing competency, we had 100 partners in North America complete and certify that competency.”
Cook said that they were pleased by progress both in their overall distribution business, which continues to mature and expand, and in the differentiation provided by their financial services.
“Our Working Capital program aimed at improving cashflow and increased credit, was up 111 per cent globally,” she said. “Dell Financial Services, which handles end user leasing, was up 32 per cent and is now approaching a billion dollars overall.” She also noted the importance of the more flexible payment solutions Dell has launched for IaaS, including Pay as You Grow, Provision and Pay, Scale on Demand and Cloud Flex Pay.
Cook indicated that she has no breaking news to report on what will be done with the Dell and EMC channel integration. The plan is still to have a framework in place by the start of the 2018 fiscal year next February, although she acknowledged, given the size of the programs involved, much work will still need to be done by then.
“While there are similarities in the two programs which will speed some things up, the goal for February is to get the basic framework done and the communication part on the front end,” she said. “The goal for then is to provide clarity. It will take longer to integrate the back ends so that we have that seamless integration. As to when we will have one single program, determining that will be the work ahead.”
At this stage, Cook was not able to provide more clarity in how the recent announced divestiture of SonicWALL and Quest assets will roll out in terms of channel management. Dell has spent considerable effort over the last year building out programmatic assets in this space and encouraging these partners to develop complementary practices with other Dell security assets.
“When we divest, they will have their own standalone program,” Cook said. “Some partners will be shared and we will work through what Dell partners will be reselling. That work is underway, but details are not yet public yet. The same applies for details on exactly what assets will be leaving Dell for the new company.”
Cook said that the expectation is still that RSA, and the other EMC Federation companies, will be Dell Technologies companies, but not necessarily a part of Dell in terms of Dell’s own channel program.
