Michael Dell: New Channel Structure Creates More Growth Opportunities For Partners

Dell Corp. Founder, Chairman and CEO Michael Dell Tuesday said the company's move to tightly integrate its channel business into its sales organization is designed to accelerate channel sales growth.

"When we started the channel program back in 2007 -- because it was a relatively new effort -- it kind of made sense to have it as a separate organization," said Dell in an exclusive interview with CRN. "We are really proud of the work that our partners have done growing that. It is now 35 percent of our commercial business, and it is time to integrate it in. I think it creates even more opportunities," Dell said.

Dell's efforts to streamline its sales organization are not exclusive to the North American market, he said.

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"We are doing this not just in North America but the whole world. This simplifies the whole structure. It allows us to go faster," Dell said. "It is all about growth."

Dell said the changes are going to lead to "enormous" new opportunities for partners as Dell works hand in hand with them to grow sales. "We are going to be working even more closely with our partners to increase our reach and coverage," he said. "Our inside teams and our channel teams are going to be working even more closely together. I think it is a fantastic step forward. I am super excited!"

The net impact for partners: "Faster, easier, better and bigger," said Dell.

Dell this week in its first major shakeup since it completed its $24.9 billion private equity buyout last month put its channel sales organization deeper into Dell's regional organizational structure as the next step in its growth strategy. The company also named a new president of North America, Bill Rodrigues, and a new vice president of global channels and alliances, Cheryl Cook.

Cook replaces longtime worldwide channel chief Greg Davis, who started the official Dell channel program nearly seven years ago and helped build it into a $15 billion business, about 26 percent of Dell's $57 billion in annual sales. Davis is moving on to a new role as vice president of software and peripherals at Dell.

Under the shakeup, the channel and the company's direct sales organization come under the same sales leadership with Rodrigues at the helm in North America.

"Dell's channel partners are now an integral part of the way that we communicate and work with our customers globally, and their feedback on our strategy and Go-To-Market is extremely important as we move forward as a private company," said Rodrigues in a statement emailed to CRN. "Our new structure came about partly in response to feedback from the partners and is designed to simplify decision making and further optimize our operations. We have strong and experienced leaders in our channel team, and I look forward to working with them as we move forward with the evolution of our robust PartnerDirect program."

NEXT: Michael Dell On Accelerating Channel Sales Growth

Keeping the channel business as a separate organization limited the growth of the business, said Michael Dell. "That limited the full potential of the business," he said. "Now we have taken that away. We can grow even more, and it's one seamless process. It just makes the whole thing simpler and easier."

Dell has said that the percentage of Dell sales going through the channel has the potential to at least double to as much as 60 percent of the company's commercial sales with no limit on just how high it could go.

When asked if the organizational changes will accelerate that momentum, he said: "It is really up to our partners. There is no reason why we can't get there faster."

Bob Venero, the CEO of Future Tech, a Holbrook, N.Y.-based Dell partner, No. 266 on the SP500, said he expects Dell to hit the $30 billion mark in channel sales in just three years as a result of the structural changes and a stepped up channel commitment as a private company.

"Dell has done a tremendous job in the channel going from a mindset that was 100 percent direct just six years ago to a $15 billion channel business," said Venero. "That is a momentous accomplishment. These changes are reducing a layer and making the sales engine of Dell more nimble. We are now a sales organization in alignment with Dell. The delineation between direct and indirect is becoming less and less."

Venero said he expects detailed account planning and mapping, which is already being done, to at least double as a result of the changes. "I think what you are going to see is a strategy that will accomplish both the partner's and Dell's goals," he said. "I see Dell now at the same top level with our other tier-one OEM partners. That is a very strong statement for a company that was 100 percent direct sales six years ago."

Dell said the company is already seeing a good number of partners selling across its entire enterprise solutions portfolio, and he expects even more to follow suit as the company steps up its moves to the new organizational structure. "We are seeing more and more of the partners building out their competencies across everything we do," he said. "That is absolutely what we are looking for."

Dell said he is "very optimistic" about the company's future as a private company building out a robust channel. "I continue to meet with channel partners on a regular basis and am super-impressed with the engagement and all the progress we are making. This is just going to accelerate it."

When asked just what kind of progress he expects Dell to make over the next year as a private company, Dell replied: "More channel love!"