Acquisitions, Channel Fuel Dell GrowthBy Steve Wexler | Print
Dell has paid lip service to the channel over the last 25 years, but recently what many considered empty rhetoric has been given more substance by solid gains through acquisitions like EqualLogic and Kace.
Like its larger rivals, Dell has been active on the acquisition front, picking up a variety of companies to bolster its offerings, including services (Perot Systems), managed services (SilverBack Technologies), storage (EqualLogic) and earlier this year, system management appliances (Kace). The latter two had their roots in the channel, which is historically uncharted territory for the company that pioneered direct PC sales, but according to Rob Meinhardt, Dell Kace president, the channels of both acquisitions are flourishing under the new management.
That should be positive news for the channel because even more acquisitions are coming, says Michael Dell. During Dell's fiscal first quarter earnings call last week he said "we will continue to be acquisitive and there are certainly capabilities we will want to add to our portfolio."
Channel Insider spoke with Meinhardt and Chip Lawson, K1000 product manager, about Dell acquisitions and the channel as they launch a major refresh of the K1000 management appliance, adding green IT power management capabilities and ITIL ready Service Desk. Meinhardt says the channel is alive and well at Dell, and the latest results for both Kace and EqualLogic demonstrate that.
"We've seen large incremental growth with Dell, 54 percent growth in new acquisitions in the last 90 days." While at least part of that growth stems from Dell's direct sales arm and larger geographic reach, the channel has also prospered, he says. All but one of the top 10 resellers who accounted for close to 80 percent of Kace sales have stayed, says Meinhardt.
Prior to the acquisition the channel accounted for 70 percent of Kace's sales and he says it’s essential to keep that focus strong. For instance, during the last three months Kace did more than 80 lunch-and-learn sessions, evenly split between partners and the direct sales team. Meinhardt adds that from a resource standpoint, Kace's channel team is one of the strongest in the unit, and was responsible for the initial Dell reseller relationship. Even better, the channel team will be doubled in size as Kace looks to build out its U.S. Channel.
Lawson, who used to manage the Kace relationship prior to the acquisition, says he was one of the first ones that really brought Kace into Dell. "I put them into our channel."