Kathy Gibson reports from the Dell Executive Forum in Limpopo – The IT reseller channel is critically important for Dell, and the vendor has come a long way from its roots as a direct-to-market player.
Doug Woolley, GM of Dell South Africa, points out that the channel has become a substantial part of the business; and this quarter will make up 75% of the company’s business in South Africa.
“As Dell has progressed as a company, from being client centric to an enterprise-rich business, we have are not able to scale the direct model effectively,” he adds. “The skills sets of partners, specialisations you offer, and the value you bring to market make it a good fit with Dell.”
Woolley emphasises that scale is important. The Dell operation in South consists of about 200 people, or 100 if the break-fix support staff are taken out of the equation.
“Plus, the complexity of the product sets being delivered to customers means we simply cannot do it on our own,” he says. “Partners are a critical success factor.”
Globally, Dell is building a future-ready enterprise, from client and enterprise perspective, Woolley says.
“And the acquisition of EMC will drive the enterprise message strongly, with new solutions that will add more value to partners.”
As the market evolves, he points out, there will be more complexity and more integration required. “The services that partners can deliver will complement the product set.
“We are not ashamed to say that we are the provider of the infrastructure layer- we provide the tin, and look to our partners to drive added value.” Dell works hard to drive a message of simplification, to take the complexity out of the solutions, and help partners to create value when the deploy these systems and provide the solutions around them.
“As Dell and EMC we are in a very fortunate position in the enterprise market,” Woolley says. “A lot f our competitors have gone on very different tacks. Time will tell, but we believe we have a very strong enterprise play that we can bring to market.”
The client business at Dell is still robust, Woolley adds, catering to the future-ready workforce.
“It is a strategically strong offering,” he says. “A lot of customers have bought into the product base, and there is a lot of value being created.”
Partners can also create a lot of value in this area, he points out, as customers look for solutions that can modernise, unify, customise, empower, discover and safeguard their businesses.
“In the South African context, we don’t have the skills sets or the scale to effectively address this market, so a partner ecosystems is important to us.”
To add further value, Dell is looking to incentivise partners to deliver specialised solutions. “We are driving to integrate with the cloud, partner with the bigger software partners in the market,” Woolley adds. “We are orchestrating that with strategic partners like SAP, Nutanix, Intel, Microsoft – in many instances we are their first go to market with their solutions.
“There is a huge amount of opportunity in this environment, but its something all of our partners are always aware of.”
Dell has three routes via which it engages with customers.
“The direct to customer stream is always a bone of contention,” Woolley says. But the direct model is historical, and comes from the fact that when Dell started up, it was able to re-engineer processes to the extent that the company was able to provide built to order PCs very competitively and the direct channel was the obvious route to market.
“But as the product stack has become more complex, and we have expanded the product stack to be more enterprise-rich. Now we have more solutions that partners can bring to the environment, and so we have evolved the channel market.
“This has accelerated over the last 24 months, and will accelerate again on the back of the EMC acquisition.”
It’s not only on product sales that partners can get involved: they can also make a business out of services. This can be in the form of break-fix services or deployment, and either on their own, in conjunction with Dell, or completely outsourced to Dell’s support staff.
The company’s new directions are paying off, Woolley says. “For the last eight quarters, we have been the top x86 player from a unit shipment perspective. And we would like to be the number one from a value perspective as well. I think we are making massive inroads and hope to get there soon.”
Dell was also voted the number one PC brand in South Africa last year, which is particularly significant in that the company only plays in the premium brand market and not the consumer. It has also become the number one vendor in monitor sales.
It is a Level One BEE contributor, which adds additional value for partners.
In terms of ProSupport, Dell South Africa has been the top organisation in the EMEA region for the last three years. “This break-fix ability is one of our key differentiators,” Woolley says. “And there are numerous opportunities for partners to be involved.
In addition, last year we were Microsoft’s top ASP partner, and VMware’s top OEM partner. We can see that the partnering model does work and are making good inroads with other companies as well.
The proof is in the numbers, though, and Dell SA’s sales through its partners have grown 49%. Even more impressive in this mix is that the company has seen 68% in the enterprise market, and 40% in the client business.