CRN Interview: Dell Chairman & CEO Michael Dell

CRN: Given Dell's heritage as a direct-sales company, are there cultural issues with respect to growing things like deal registration, rebates and other traditional channel program elements and strategies?

DELL: I think as you probably sensed, we're taking a fresh look at all these things and saying, 'What should we be doing for the future?' We've already started doing deal registration in parts of our business, and it wouldn't surprise me if we started doing it in more [parts] of our business. So we're really taking a fresh look at the whole thing.

CRN: In your book, you wrote extensively about your view of the channel -- this is back in 1999 -- your view of inventory and your view of retail. And you sort of describe a situation where when you tried retail, it was because other people said you really have to do this. And you wrote that when you got in, you realized it wasn't really profitable for you to go indirect. So then you pulled back and reaffirmed Dell's direct strategy. How would you describe what's gone on between then and now?

DELL: Certainly, a lot of things have gone on between then and now. That was eight or nine years ago. We have entire countries in our business that are completely indirect and channel-driven, and they are quite successful for us. And we have very big partnerships with a number of solution companies, solution provider organizations, integrators, resellers, OEM partners. Our business has evolved quite a bit from that time. It wouldn't surprise me if it continues to evolve.

What we're seeing now is we've quietly developed this business over the last few years. It has evolved quite well. There are lots of solution providers who appreciate that and are happy to engage with us. We think there are many more like-minded partners out there. We're going to keep expanding the rates of things we do, and it's constructive for our partners and for us. As I said, we're not bound by the past.

CRN: Are Dell's competitors -- feel free to name them if you want -- vulnerable to an aggressive vendor that will compete for channel mind share?

DELL: You know, I think we've heard from a number of partners that appreciate the fact that we work directly with them, that we don't have distributors, that we have a broad range of products and that we even have services they can resell. When you combine that together with their solutions, their software and their unique offerings, that makes it a very powerful and compelling solution on top of the No. 1 brand of computers in America. You put it all together, and this is sort of a latent opportunity. We have not done as much in the channel as we probably should have -- certainly not as much as we could have. So now we're going after it.

CRN: But this is still keeping faith with the direct proposition?

DELL: We're going to have a direct business, we're going to have an indirect business, and those are separate businesses. We've had these partnerships parts of our business for several years, and it has worked well. So we want to keep doing more.

CRN: Retail is sort of a different animal, but there is some overlap with the commercial reseller channel. Last year, some folks at Dell started talking about a couple of new experience stores: one in Texas and one outside New York City. The New York store isn't going to happen, we've been told. What's your thinking in terms of Dell retail, brick and mortar?

DELL: I think you'll be quite interested to see what we do, and it's going to be quite aggressive. I think you'll see Dell showing up in a lot more retail locations -- not only here in the U.S. but also in major countries around the world over the next several quarters. So stay tuned.

CRN: Last week, Dell talked a lot about Linux on the desktop and with respect to the Microsoft-Novell partnership. Is that a real potential growth area for Dell and its channel partners?

DELL: Linux has been around for quite some time, and on the server side Linux is well-established. On the client side, the opportunity is more emerging. We certainly see an enthusiast segment that is interested in Linux. We see some scientific and technical users. What we're doing very much here is listening to what our users tell us. If we see demand there, we're going to go and do our best to respond to it.

CRN: How would you describe Dell's relationship with Microsoft?

DELL: Microsoft is one of our key technology partners.

CRN: Was there any blowback from Microsoft with respect to Dell's Linux moves?

DELL: No.

CRN: Apple is set to come out with its iPhone in the next few weeks, perhaps next month. What's your thinking about that? Is it a competitive threat? Will we see a dPhone, a Dell phone or anything of that nature?

DELL: When you look at the space that exists between, let's say, a cell phone and a PC, there are all sorts of products that are put out there, proposed, experimented. Some of them have gone on to relatively nice success. But many haven't. It's sort of an area of great experimentation.

Nobody knows exactly what the right device is. It's not a two-inch screen, it's not a 15-inch screen. There are all sorts of tests in there. There are some reasonably successful products. It's an area we're paying increasing attention to. I wouldn't look for anything in the short term for us there, but we are certainly looking at it, as there is dramatic growth in next-generation wireless broadband networks. People want to take the Internet with them. It's something that's very interesting to us.

Next: Where do services fit into Dell's strategy?