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Dell: Channel Will Help Us Deliver Cloud Services

Dell's services chief said the company will launch a services initiative this quarter that will complement offerings from its channel partners.

Dell is accelerating its strategy to become more of a cloud services company and it wants solution providers help it get there.

On a conference call detailing Dell's planned acquisition of managed security services provider SecureWorks, Peter Altabef, president of Dell services, said SecureWorks and other services Dell recently acquired from Boomi and InsiteOne would quickly become integrated channel offerings.

Dell Tuesday said it plans to acquire SecureWorks for an undisclosed cash sum. Dell expects the acquisition to close within 40 days, Altabef said.

"We're very actively moving in that direction. Launching this quarter, we'll have a full range of support services actively be available through channel partners. That's just the beginning," Altabef said. "We're very eager to expand services. We're already underway [and] as the channel becomes a bigger and bigger part of revenue for Dell as a company, we're making sure services is an integral part of that."

Altabef didn't detail the services initiative set to launch this quarter, but he added that they should not compete against VARs' own services offerings but instead act as a complement.

"We have relationships with several security specialist companies and with those we do not see a lot of overlap. We expect to maintain and improve those relationships with SecureWorks. We do not see it negatively impact any existing partners."

He added that SecureWorks also markets through channel partners and Dell plans to embrace and expand those relationships too.

Michael Cote, chairman and CEO of SecureWorks, said his company launched its channel program a couple of years ago and VARs account for about 20 percent of new business each year.

"It's still in its infancy from a developmental standpoint. We have a long way to go but this acquisition allows us to do it. It allows us to distribute through the channel in a pretty powerful way," Cote said.

SecureWorks was founded in 1999 and its business has grown from under $1 million nine years ago to $120 million last year, Cote said. About 90 percent of its sales comes from recurring revenue service contracts while the other 10 percent comes from consulting services and other miscellaneous revenue, he said.

When researching possible acquisitions in the security space, SecureWorks stood out for its managed services, security consulting and threat assessment capabilities, Altabef said.

Dell had been actively seeking a security-as-a-service company and it will look for additional acquisition targets to build its cloud services portfolio, Altabef said.

Next: Appliance Integration With Kace


"You see through the acquisitions we've made recently a great deal of emphasis to expand capabilities in cloud,"Altabef said. "We acquired Boomi, a leading platform for SaaS application integration . You saw us only about two weeks ago acquire InsiteOne, the leading cloud-based database imaging solution in health care.

"Now with the acquisition of SecureWorks, what you see in each is a focus on particular areas where we think the market is underserved," he added. "Not only is cloud a growth market, but whether it's application integration or huge growth in images stored on a cloud, or security, Dell is moving toward the future of services at a very rapid rate."

In addition to a cloud model, SecureWorks has its own appliances on which its security services platform can remain on site. Altabef said Dell may eventually look to combine the functionality on that device with the functionality of its systems management appliances it picked during its previous acquisition of Kace.

"We may look overtime to combine that infrastructure and have appliances that are broader in scope than each [individually] is today," Altabef said. "Our ability to embed security protocols in the server level and storage level is very exciting. But it's very early days. There are powerful synergies between what Kace does and what SecureWorks does today. We think that's a great opportunity going forward."

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