CRN Exclusive: Dell's Vitagliano On Channel Growth, Partner Opportunities

Dell's Channel Push

Frank Vitagliano, vice president of worldwide channel strategy and programs at Dell, delivered a keynote address at Tech Data's TechSelect conference in New Orleans, where he spoke about Dell's commitment to the channel and the growth the company has seen.

During his keynote he told the audience of TechSelect members that Dell is now offering them a 4 percent rebate incentive on select enterprise products.

Roughly 40 percent of Dell's revenue last year, or about $24 billion, came from the channel, according to Vitagliano. Dell's channel sales were up about 18 percent over the last year and the company is not planning to stop there, he said.

Vitagliano sat down with CRN after the event to talk about Dell's channel push and the biggest opportunities he sees for partners.

During your keynote you said Dell has seen five or six times the industry growth in the channel. What is the biggest reason for that growth?

A lot of it just has to do with the realization people now have that we've got an unbelievable set of solutions end to end. If you look at our product lineup, it's better than it's ever been, starting with laptops, tablets, desktops, our server line is killer, right up through storage. We've made a number of huge enhancements to our storage line over the last six to nine months with Flash technology. A lot of it is just our products are resonating in the marketplace, and then the second piece is many partners are looking for an alternative to what they were doing. Third, the business environment is a pretty good business environment, too. It's a combination of those three things.

In terms of your share growing so much, do you think you're taking share away from some of your bigger competitors?

If we're growing, we have to be taking share. It's math. If you look at it, it's really across the board. I think our story is resonating, and there is a lot of churn in the industry with companies splitting, companies acquiring, IBM selling their server business to Lenovo, and Lenovo buying Motorola. One of the reasons I would tell you that we're successful is we've got some stability. We went private 18 months ago. We said we were going to do a number of things, and we've done them. Partners are looking at that saying, 'Well, these guys are pretty stable. They're doing what they say they're going to do. They're making major investments, and they're investing in the channel business.' I think all of that has been contributing to what's going on.

You said during your keynote that Dell has the most robust portfolio in the industry. Why do you think that is?

If you look at desktops, tablets, laptops, which are as good or better than anything in the industry, then you migrate up the chain -- servers, storage, networking and our enterprise products. Then you look at the software offerings that we have. Between SonicWall security offerings, our Wyse workstations, right through Quest, who we acquired a few years ago, there is a whole host of software properties. We've done $18 billion in acquisitions over the last five or six years. That's pretty big. And we've integrated it all, so when you line it up end to end, it's a compelling set of solutions and it's resonating with our customers. Now what happens is they look at Dell as way more than a company that can just adequately supply them with their compute requirements. … I think if you stack up the portfolio, there really is no vendor in the marketplace that has a portfolio that can stack up like that.

Do you have a little more work to do in the enterprise space?

We really just launched enterprise in distribution. For the most part, what we did with distribution is we started with our client products and got that going. We started learning about some of the things that we need to do better and worked through the kinks, and we really just launched our enterprise products there.

Is it a priority for Dell to grow in the enterprise space now?

Yes, but I don't want to dismiss the client space as it's a really important space. We have a major focus on growing our enterprise business, and it's a huge opportunity for us to do that. We have a significant presence in the marketplace and it's resonating with end-user customers, but it's also resonating with the channel. You'll run into a lot of partners who'd say, 'Two or three years ago I wasn't doing business with Dell, and five years ago I wouldn't even think about it,' but they're doing business with us today. We spend a lot of time with them. We talk to them about what we're doing, what they're doing, we run an advisory council about two or three times a year. You have to pay attention to that.

What is the biggest opportunity in the channel right now for solution providers?

In all the years I've been doing this, every couple years there is this 'next new big opportunity.' … Here's what I think the biggest opportunity is. I think the biggest opportunity for partners is to really understand your customer's business and become integral. The vast majority of TechSelect members are small partners. The reality is that those partners in their local communities, they're the trusted adviser from an IT standpoint for the companies that they're working with. Those companies look to those partners to be their IT department. To me, the biggest opportunity is to understand your customers. Understand the requirements. The partners always figure out the technology; they always do. That's never been an issue. What will happen is they'll become so integral to that customer's business that it will just be natural for them, and that's how you build a business.

Why do you think consolidation has become such a growing trend?

From a partner standpoint, what I do think we're starting to see is a lot of consolidation where for years you've just had a number of smaller partners. What is happening is that consolidation is continuing to accelerate, and what you're seeing is larger partners form. In other words, instead of talking about $100 million partners, you're talking about $200 million, $300 million and $400 million partners. We just saw a big merger of two major security partners, FishNet and Accuvant, and combined they are over $1.5 billion. I think you’re going to see more big partners over time because consolidation is going to continue to take place.

What is the message to channel partners that you think is most important to get across?

Continue to make the investments in your business. The most important thing is to understand the customer, understand the requirements and then jointly develop relationships to satisfy the customer with your vendor partner because we view it as a joint partnership. That's what they do. TechSelect is a great example of that. These are folks coming out, spending two or three days, and they go to all the events, and go to the hangouts. During all the business hours there is networking going on and people making big investments, and that’s how this industry works. It's a relatively close-knit industry where people are making major investments. It's pretty significant.