Don’t let the latest quarterly financials fool you, Dell Technologies says. Despite Q1 results that sent share prices tumbling last month, channel-generated sales are way up.
Indeed, in the first three months of its current fiscal year, client device sales through channel partners climbed 9% year over year, server sales grew 18%, and storage sales soared 26%. Channel revenue overall, meanwhile, increased 16% while revenue through distribution rose 10%.
“We continue to drive double-digit growth and continue to see really strong performance,” says Cheryl Cook, Dell’s senior vice president of global partner marketing. “Our partners are helping us realize both share gains as well as growth, and their businesses are enjoying growth too.”
That trend stands in contrast to the broader first quarter numbers Dell posted on May 30th, which included a 6% uptick in client revenue plus a 1% decrease in storage revenue and 9% dip in server and networking sales.
According to Cook, resellers are cashing in on a technology-led investment cycle among businesses of all sizes. “Digital transformation is real,” she says. “Irrespective of what industry or vertical or customer, many customers are having to digitally redefine themselves.”
Those customers are turning to Dell in swelling numbers, she continues, due to the breadth of the vendor’s portfolio and the wide array of on- and off-premises deployment scenarios it supports. “No one really has a crystal ball on which workload is best served where,” Cook states. “The strategy we’ve embraced offers choice and flexibility for customers frankly to deploy their workloads where it’s best served.”
The range of options open to Dell customers grew significantly in April when the company introduced the Dell Technologies Cloud, a hybrid cloud platform designed to let businesses deploy, manage, and migrate VMware-based workloads across on-premises and off-premises environments. That and other efforts to promote cross-selling within Dell’s family of brands—which includes not only the Dell client PC division and Dell EMC infrastructure unit, but VMware and Secureworks among other businesses—are spurring partners to promote a greater variety of Dell Technologies products.
“We’re seeing an increase in the number of lines of business that our partners are selling,” Cook says.
Partners are bringing net new customers to Dell as well, she adds, including 15,000 during Q1 alone. Cook gives the various incentives Dell offers for “competitive takeouts” much of the credit for that momentum.
“We have ambitious share gain aspirations,” she says. “The channel is a really important, viable part of our go to market to help us do that.”
Access to diverse financing options is helping fuel channel sales for Dell as well, according to Cook, who says that channel-initiated deals through Dell Financial Services increased 11% year over year in the first fiscal quarter. Like Ingram Micro, SYNNEX, Tech Data, and D&H in the world of distribution and HP Inc. among hardware makers, Dell offers clients a menu of funding programs ranging from traditional leases to technology-as-a-service plans with consumption-based pricing.
“We’re seeing one size doesn’t fit all for many customers,” Cook says. On average, she adds, Dell partners that satisfy rising demand for “creative financing alternatives” by leveraging Dell Financial Services grow twice as fast as other resellers.
Dell plans to focus in the months to come on extending long-term efforts to make partnering with the company easier. By the close of its prior fiscal year, Dell had reached a 95 percent accuracy rate on deal registrations and was responding to 80% of partner quote requests within four hours. According to Cook, however, much more remains to be done.
“We know we’ve still got more to do to simplify the overall experience, so we’re going to continue to stay focused on that,” she says. “There’s going to be a lot of work underway for some time.”
