Make no mistake, Dell Technologies is feeling the effects of the supply chain slowdowns currently impacting the entire IT industry. It just believes that a phenomenon costing everyone time and money may be giving it an edge on its competitors as well.
“I would say our supply chain, actually, and our execution within our supply chain is advantaged to most,” says Cheryl Cook, the company’s senior vice president of global channel marketing. “We too are participating in the global supply constraints that have been well documented, but I think our relationships, our buying leverage, the scale of our company, and the flexibility and transparency with which we manage our supply chain have actually helped us execute it as well as possible.”
Dell’s latest quarterly financials, posted last month, make that assertion hard to argue with. The company reported record Q2 revenue of $26.1 billion, up 15% year over year. It did even better through the channel too, where sales climbed 45% in the second quarter and 29% through the first half of the fiscal year. Partners are sharing in that success as well, says Cook, noting that rebate payments were up 20% globally in the second quarter.
The numbers are stronger still for Dell’s Client Solutions Group, where revenue through the channel rose 84% year on year in the second quarter and 49% in the first two quarters combined. Cook credits that momentum to still heavy reliance on home-based work due to the coronavirus pandemic.
“As the world continues to pivot and respond to remote working, remote learning, and enabling all the new modernization efforts to securely operate that way, we’re just seeing really unprecedented historic demand for our client solutions,” she says.
Like its partner Intel, moreover, Dell expects widespread office re-openings, when they come, to fuel a whole new wave of purchases as employees reunite with the aging desktop machines they left behind in 2020. “At a minimum, we haven’t looked at them in 18 months because we’ve been home, or even longer,” Cook observes.
Dell’s Infrastructure Solutions Group, meanwhile, is benefitting from the same COVID-related forces driving rapid growth in client sales. Server revenue through the channel jumped 42% year over year in Q2 and 27% through Q1 and Q2 together. Even Dell’s comparatively sluggish storage business grew 4% through partners in both the second quarter and first half of the year.
“There’s hardly an industry that we can point to that hasn’t had to radically think about how to enable agility and flexibility to both their customers and their workforce,” Cook says. “As that’s happened, you’re also seeing people having to address their infrastructure to support those cloud-native applications or to support working remote.”
Dell expects APEX, the as-a-service managed cloud and infrastructure portfolio it introduced in May and is currently testing in private preview with North American partners, to drive additional back-office growth when it enters general availability next month.
“Our partners are seeing the same trend in the marketplace with customers as we are,” Cook says. “There’s an increased desire to really bring a radically simplified public cloud-like experience to their hybrid cloud reality.”
How long that desire, and the need for fresh client hardware, continue to produce outsized returns for Dell and its channel despite component shortages is impossible for anyone without a crystal ball to forecast accurately, according to Cook, but the near-term outlook remains strong.
“We still see tremendous opportunity for the momentum to continue in the second half,” she says. “The way we think about it, if you just step back at the highest level, the world needs more technology, not less.”
