Dell Achieves Significant Channel Milestones

By Michael Vizard  |  Print this article Print
Dell channel business

Dell is seeing robust sales through the channel. Though the company sells much of its software and hardware direct, its indirect business is growing faster.

A year after creating a unified channel for the Dell Software Group, the company now boasts that channel partners account for almost 60 percent of the global revenue generated by the group and that sales since consolidating the Dell Software channel programs are up 15 percent.

In addition, Dell now has 3,500 unique partners that account for 30 to 35 percent of its business, which is roughly equivalent to $20 billion a year in revenue.

Since Dell made a stronger commitment to the channel after the company went private, the 12 software companies that it acquired over the last few years—including Quest Software, SonicWall and AppAssure—are more profitable for Dell when their offerings are sold through the channel, after all the costs and follow-on product opportunities are taken into account, said Marvin Blough, executive director of worldwide channels and alliances for Dell Software.

In fact, even traditional hardware resellers are getting into the Dell Software act, Blough said. The number of Dell hardware partners that are selling Dell Software products has risen 8 percent.

"The area where we see the most amount of interest from Dell hardware partners is in the area of data protection," Blough said.

Blough attributed most of Dell's success in the channel to a vigorous deal-registration effort that protects partners from price competition and compensation policies that don't incentivize Dell salespeople to take deals direct. Dell is reporting that software deal registrations climbed 61 percent year over year, and the value of those registered deals grew 32 percent quarter over quarter.

While Dell still sells a significant amount of software and hardware direct, the indirect business is growing at a much faster rate, Blough said. He declined to speculate as to when the channel might account for more than 50 percent of Dell's sales.

Overall, Dell is reporting a 42 percent year-over-year growth in sales for information management software, a 20 percent increase in systems management tools and 7 percent increase in security. Integration software sales, most notably in the form of Dell Boomi, are up 274 percent year over year.

Blough said he expects that momentum to continue because almost 11,000 individuals at partner organizations completed more than 37,000 Dell Software training courses that now span 150 different products. Dell is also reporting a 102 percent increase in software course completions by partners globally to date in fiscal year 2015 and a 50 percent increase in unique individuals taking the courses quarter over quarter.

"We're well beyond what we expected," Blough said. "We've just seen an unbelievable response from our partners."

Michael Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.