Dell’s first half numbers have generally been good, particularly in clients, where the company is having to battle assertions they are looking to expand at the expense of channel partners.
Dell Technologies is coming of a strong second quarter and a strong first half generally, but the overall success of the channel business has been tempered by assertions that Dell is stepping up its direct business, in the client business in particular.
“We had another phenomenal quarter, with another record-breaking performance,” said Cheryl, Cook, SVP, Global Partner, Embedded and Edge Solution Marketing, Dell Technologies. “For Q2, we saw order revenue to the channel up 45% year-over-year. For the full half year, it was up 29% YOY over the first half, the year before.”
Cook acknowledged that while the comparison benefits by being paired against the pandemic lockdown quarter of Q2 2020, growth was still substantial, and included areas which weren’t as severely hit by the lockdown.
“We saw continued growth in client solutions, which was up 84% in Q2, and 49% year over year,” she said. “We were also up in servers, with growth being only 4% against Q2 last year, but up 27% over the entire first half.” Storage growth was up as well, 4% for both the second quarter and the first half.
“Other parts of the business grew strongly as well,” Cook stated. “The global alliances businesses was up 15% over Q2, and 16% for the half, and the OEM solutions business was up 32% for the quarter.”
Dell has been emphasizing the value of upselling and cross-selling to partners for several years, and Cook said the new data continue to validate that argument.
“We saw robust demand and execution across entire lines of business and the breadth of the portfolio,” she noted. “We continue to see tremendous growth in cross-selling and upselling. Partners that grow sales in three lines of business made 8X what partners made who sell two lines, and 39x what partners who sell one line made.”
Cook also indicated that Dell just paid out more rebates to partners globally, to 63% of new and reactivated buyers in Q2. There were just under 268,000 deal registrations for the first half, 128,000 of which were in Q2.
So if the channel business is so good, why are many partners expressing concern, reported last week, that Dell’s North American channel business has increased its emphasized on taking Dell client business direct? Cook did not deny that Dell is trying to increase the amount of channel business it takes direct, but said that it is part of an attempt to grow overall share, and not come at the expense of the channel.
“We just want to capture as much market share as we can,” she said. “We aren’t looking to shift share to direct. There is so much opportunity for everyone. The overall opportunity is tremendous. We don’t see it as an introduction of conflict. We want to grow in all routes to market. I wouldn’t characterize this as channel conflict.”
Dell has continued to roll out its APEX as-a-service offerings, and while historically most channel partners to not jump at the chance to invest in a market that is still in the early stages of development, Cook said that Dell is pleased with the channel response so far.
“We are seeing good response and receptivity to our APEX offerings,” Cook said. “Partners will be able to participate in these business models while extending their own unique services around these deployments. It’s definitely a long-term strategy, and we are in the early phases of this transformation. It will be public and hybrid cloud for the foreseeable future. Everything is not going public cloud. But customers do want a radically simplified operating and management experience, and we offer that with flex on demand and pay as you grow. These new APEX Dell storage services are also managed through a console.”
APEX was originally launched as a private preview to select partners in North America.
“Next month we will open that up generally to all partners in North America and internationally,” Cook said.