Three Questions For Dell's Channel Chief

In March, Dell made a strong move into the channel by partnering with distributors Ingram Micro and Tech Data. The move is part of Dell's attempt to woo and win solution partners who may have been a bit skittish of the company in the past. Three months later, Greg Davis, vice president and general manager of global channels for Dell, talks about some of the opportunities and hiccups the company has seen with distribution, along with the challenges the company sees in the market and its channel strategy to counter a down economy.

During Dell's Q1 earnings call, Michael Dell mentioned that his company and the brand-new distribution partners, Tech Data and Ingram Micro, are learning how to do business with one another. How is that partnership going? And can you shed any light on the differences on how the companies do business?

Going to distributors was a big part of the value add our channel asked us to look at. Partners can take advantage of programs with Ingram Micro and Tech Data that they couldn't when buying from Dell. By partnering [the distributors], partners can leverage lines of credit and have access to fixed configuration items.

Right now there are six configurations available through our partners that allow partners to get a desktop or notebook delivered rapidly. Tech and Ingram can deliver in 24 to 48 hours. We chose the products to be sold through distribution based on partner feedback. And because it's a new operation for us, as Michael indicated, we're still learning how to do business with Tech Data and Ingram Micro.

That said, it's nothing wildly complex, mostly little operational things. We've never really done business in that environment. So we're all learning what the best ways are to do business together.

Here's an example. At Dell we build to order for partners. That's different than building and stocking on a shelf. Stocking for a distribution center requires UPC codes; build to order doesn't. It's not terribly complex, but it is a different process. Building a product to be scanned in and made available to thousands of partners vs. taking an order, building and delivering -- those are the things we're still learning.

There's great potential here and we will continue to expand the product lines and programs for partners in order to help them get Dell product in fixed configurations.

We're nearly halfway through 2009 and about a year-and-a-half into Dell's partner program -- what's the focus for you this year?

The focus of [Dell's] programs -- especially this year -- is based around certifications. We recently expanded our enterprise architecture paths because we see a significant play around that hardware and managed services for partners. Specifically, we are creating solutions around managed services for SMBs that partners can resell. And partners are beginning to get on board with the solution and, as a result, can add margins to their businesses.

We're also watching the trends in the market. Mobility solutions continue to be a hot trend across customer types. Dell has made some recent announcements around those solutions, in the K-12 market as an example.

Channel partners are participating in those solutions and packaging and selling them. We see that as a solution for a customer, and we want to provide solutions rather than hardware. That means we need to find the right types of partners with the right skill sets and the focus on those vertical customer types to provide a solution. Be it K-12 or health care, we are developing a set of solutions and skills to meet those industry segment needs.

Hardware is suffering right now. Client hardware sales are down across the industry. But that is Dell's traditional bread and butter. What sort of strategies do you have in place to deal with the downturn in client hardware sales?

The client business in our industry is challenged but it is challenged all around the industry. The real focus of our channel programs are built around solution partners and figuring out how Dell can create a better solution and enhance value in the market proposition.

For us, it is less about the client hardware as it is the particular solution for the customer. Of course, client hardware fits into that overall solution. As Dell develops key solution strategies for different customer types, my team develops channel programs and strategies so partners can participate. We're committed to do it. We see that in managed services. We want to launch managed services in a manner that our channel is attracted to it and can participate and help us grow there.

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