The Michael Dell Effect


It's been three years since Dell founder, Chairman and CEO Michael Dell began the grand experiment to transform the company he started in his University of Texas dorm room from a direct-sales antagonist into a channel champion.

In the process of that channel experiment, Dell himself has moved from an entrepreneur who started in this business 26 years ago building PCs to a world-class, seasoned Fortune 50 CEO running a $60 billion diversified information technology business.

Dell, in fact, has distinguished himself as one of the few entrepreneurs who has been able to successfully navigate the treacherous technology landscape from the great PC revolution of the 20th century to the Internet revolution of the late 20th century and now the cloud computing revolution of the 21st century. He also is a channel leader who hasn't gotten the credit he deserves for embracing channel
partners and the indirect sales channel.

In our cover story this week, Scott Campbell takes a close look at the so-called Michael Dell effect and what he finds is that Dell has made amazing channel progress. Dell's global channel revenue increased 49 percent in the second quarter of 2010. U.S. channel sales were up 38 percent during that same period. What's more, as of October, Dell had more than 61,000 registered partners and about 2,300 certified partners.

Michael Dell also deserves credit for giving the channel reins from day one to Dell Vice President and General Manager, Global Commercial Channels Greg Davis, who has shepherded and nurtured the program each and every step of the way and made significant progress each and every year.

Bob Venero, president and CEO of Future Tech Enterprise, a highly respected Holbrook, N.Y., VAR500 company, was one of the first partners to meet personally with Michael Dell in the wake of the Dell Channel program launch.

Three years ago, Venero's Dell business was only 1 percent of his $100 million business. Today, that Dell business accounts for more than 25 percent of his $100 million-plus business. What's more, Future Tech has won multiyear contracts in partnership with Dell totaling in excess of $80 million.

"Michael Dell is one of the most approachable, down-to-earth business leaders that I have had the pleasure to interact with," said Venero. "He is always available for the channel, whether it is for helping to close business or to expedite an existing order."

Venero recalls that many of his colleagues warned him three years ago that he was being "crazy" and "foolish" for partnering with Dell. Those colleagues have been proven wrong, says Venero, to the "tune of $80 million."

"Unlike a politician who makes promises to get elected and then fails to deliver, Michael Dell has delivered on his commitments and promises to channel partners," said Venero.

BACKTALK: Are you seeing business wins with Dell as a partner? Contact Steven Burke at steve.burke@ec.ubm.com.