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If you think Michael Dell isn't thinking about the solution provider channel, think again. In fact, the channel is in his crosshairs as a new avenue for growth.
In an interview with CRN Senior Editor Edward F. Moltzen this week at Dell's Round Rock, Texas, headquarters, the computer hardware icon shed light on the company's new efforts to ramp up solution provider sales, which now total about $4 billion annually in North America. Dell also gave his take on a range of topics, including Linux, Apple's iPhone, AMD processors in Dell systems and the company's new retail push.
CRN: One thing that drew a lot of attention recently is when you told your employees, "The direct model was a revolution. It's not a religion." What did you mean by that?
DELL: In the last several years, we have been growing fairly significant business working with channel partners and solution providers. And I think, first of all, that's a real business. But more than that, it's just a really important growth opportunity for us to work with partners as we expand the ways that we're going to go to market. So if you look back a couple of quarters, I think you'll see a very different Dell in terms of the range of partnerships that we've created. And it's really an acknowledgement of the relationships we've already built and intend on building further with solution providers, channel partners and retail partners -- not only here in the U.S., but around the world.
CRN: How do you intend to grow Dell's business going forward, working with more solution providers or doing more business with the solution providers you have now?
DELL: We've been listening carefully to the needs of the solution providers and trying to understand the kinds of things we can do to enhance the [channel partner] program we already have. You should try to recognize that it's already a several billion-dollar business. Clearly, there are a lot of happy partners there. We could do some more things like creating a more definitive program, an authorized logo, that kind of thing. We could do things like deal registration, which we've already started to do in our federal program. So we're going to work on a number of different program elements and reach out to these partners because, actually, this part of our business has been growing faster than the overall category. We take that as a positive affirmation that there is a great interest here. We're going to ramp it up quickly.
CRN: What will Dell's business model look like two years or five years from now? What can we expect to see?
DELL: I think what you can expect to see is Dell is working with a wide range of partners. Today, the direct model serves customers, and we've addressed roughly 20 percent of the opportunities out there. There are certainly folks out there who don't want to buy direct. So now, those customers will have a chance to have Dell product as well. We want, then, to work with customers in the channel to create the solutions that they can take to market to pursue the unique service elements they add to their businesses.
CRN: Dell is obviously a much different company today than it was when you started the business. How would you say the channel is different today than when you started your business?
DELL: The great thing about the channel, especially those channel partners that have succeeded, is that they keep evolving and keep changing and adding new capabilities and services. Certainly, we've seen all sorts of changes in the last 23 years, as long as I've been in this business. The smart, successful channel companies have continued to move their value-add into more interesting and developing areas. That's a continual process. It's going to keep happening forever. I think that's what the future is ... defining those things that are really relevant for customers and going to those areas. What we're finding as we go further and further with partners is that there are large range of unique solutions that these partners can provide to customers that would be way outside the range of things we would traditionally do as a company.
CRN: There are perceptions in the channel that Dell competes with resellers and aims to steal their business with low prices. Has there come a point where Dell will become a kinder, softer company to partner with than what's perceived in the channel? How would you describe Dell as a business partner?
DELL: The thing you have to recognize is that there are going to be a wide range of potential partners out there. We have found great success with a number of partners who have said, 'Hey, there are things that Dell does, there are things that we do. And guess what? They're really different. And actually we value the things Dell does, and that complements the things we do.' And we look at them and say, 'Hey, this is a great complement to what we do.' So, fantastic. Those are the kinds of matches we've been able to find. We don't seem to have a problem finding lots of them, and we think we can grow that quite substantially.
CRN: As a business partner, what can Dell offer solution providers that other companies can't? How can Dell do a better job of being a partner to the channel?
DELL: Well, we can continue to offer great value. Given that we don't use distributors and that we work directly with these partners, that's certainly quite valuable. We have some flexibility as a company that's in our historical nature, and that's quite attractive. We should also recognize that Dell is the No. 1 computer brand in America. Businesses use more Dell computers than any other brand in America. So that's pretty attractive, too, to partners. They want to be using the brand that more Americans trust than anyone else.