Dell Trumpets Big Channel Gains Post Going Private

It has been eight months since Dell went from public company to the ’world’s biggest startup,’ as Dell Chairman and CEO Michael Dell likes to call it. Since Dell became a private company in October 2013, it has revamped its channel program and has been firing on all cylinders when it comes to quickly growing its enterprise IT business, Dell executives say.

Cheryl Cook, vice president of global channel alliances at Dell, told CRN that nearly every aspect of Dell is on the upswing.

’We are experiencing really brisk momentum in our overall business,’ Cook said. ’We are about to double that pace right now. We are seeing growth across all partner types, in all regional and geographic areas, and among our large national solution providers.’

Related: Dell: An Amazing Journey From A To Z

Dell is moving quickly to drive a bigger enterprise computing and channel footprint for the company, according to Cook. As a private company, Dell is starting to deliver on a promise it made during its $25 billion leveraged buyout to deliver more innovative products and services at a much more rapid rate than it could have as a publicly held company, she said.

Central to Dell’s recent success is its decision in December to move 200,000 existing Dell Direct accounts to channel partners and create a 20 percent "compensation accelerator" for its direct sales team to generate new enterprise business with Dell channel partners, Cook told CRN. The move, she said, has contributed to an 18,000 partner uptick in its channel program in the past quarter, bringing Dell’s global partner head count to 165,000.

’The teaming, collaborating and territory-mapping work continues,’ Cook said. ’Meanwhile, we continue to be very aggressive and active in driving deal registrations. That to me is really the best gauge illustrating our success.’

Partners have generated 87,000 current deal registrations, 22 percent more than last quarter and 15 percent more than last year, she said. For important growth areas such as software deal registrations, Cook said, the numbers are up 55 percent. ’Deal registrations across all categories are going through the roof,’ Cook said.

NEXT: Post-Private Dell Focuses On Four Key Growth Areas

BYODHANA

Since going private ’Dell has been investing strategically to acquire the IP and expertise it needs to package software and services in a more digestible way,’ wrote Laurie McCabe, co-founder and partner in research firm SMB Group, in a recent research note. McCabe said Dell is spending more time synthesizing its recent acquisitions into a complete solution instead of buying companies.

In March, Dell made its first acquisition as a private company when it bought StatSoft, a data analytics firm.

’Dell’s enterprise and software businesses has increased by double digits,’ Cook said. ’Our client end-user business is up 29 percent in Q1,’ she said.

According to research firm IDC, Dell PC shipments increased more than 9 percent in the first quarter of 2014, representing its third consecutive quarter of positive year-on-year growth. Dell ranks behind Lenovo and Hewlett-Packard in terms of worldwide PC market share with 13.3 percent of the market. Lenovo ranks No. 1 with 17.7 percent market share and HP has 17.1.

’The vendor's revamped channel strategy -- with greater focus on partners and solutions as well as use of PC sales as part of broader solutions -- Is paying dividends as the company benefits from the relative strength of commercial replacements as well as operational freedom and reduced uncertainty after completing the privatization,’ wrote IDC in its most recent PC Worldwide Tracker report.

Dell’s PC business, Cook said, is strong and acting as a springboard into more lucrative enterprise opportunities. Just this past quarter, she said, Dell has seen 13 percent growth in new lines of business registration where a partner may be selling just PCs or servers and added more lucrative storage, networking or other lines of business.

NEXT: Measuring Dell's Success

Of course, as a private company Dell’s financial books are closed to Wall Street investors. But on June 9 Dell reported some financials to bondholders that suggest the company is finding success. Dell reported its bond rating is up, while the cost of insuring its debt against default fell sharply. Dell said it had repaid $1 billion of debt in the first quarter of its 2015 financial year.

’There is no question we are seeing really solid growth with national solution providers Insight, SHI, PC Connection and Zones,’ Cook told CRN. Dell’s direct business is up also, Cook said.

’Our direct business is up, but it’s our indirect business that’s seeing the biggest momentum, outpacing direct business by two to three time the overall market.’ As an indicator of that success Cook said first-quarter rebates paid out to partners were up 40 percent year on year.

PUBLISHED JUNE 17, 2014