Indirect director
Andy Dow, Dell’s channel head in the UK, told HEXUS.channel that “the mood within the channel is fantastic,” when asked about the initial response to the launch of Dell PartnerDirect, in an exclusive interview.
Asked what Dell’s aims for the channel are, he said “We’re trying to achieve an environment where we can reach out to the channel and build an environment where they can prosper.”
Dow is responsible for the commercial (i.e. VAR) channel. A yet to be announced exec is dealing with the retail channel. Dow made it clear that he is focusing on solution providers to SMB and mid-sized companies. “In mid-market Dell can further the ability to sell solutions and not just tin,” said Dow.
“Traditionally the middle tier doesn’t have the closest relationship with vendors,” he added. “We want to build strong relationships that are also simple and direct.”
“We want to build strong relationships that are also simple and direct.”The official Dell line on distributors was echoed, with Dow stressing that when Dell sees additional value in going through a distributor it will consider it. However, by not initially using distribution, Dell clearly feels that it can provide the services usually associated with distributors just as well, if not better, itself.
When asked why other vendors hadn’t adopted this model, Dow indicated that that many of the things that have worked well for its direct model will also work well in its PartnerDirect strategy.
Supply chain
“The cost to the reseller is how many times they have to touch the box,” said Dow. “Our supply chain is different and we ship directly to the reseller or the customer. Also our credit structure is fairly unique as it has been built to deal with a wide base of customers.”
Dow wouldn’t be drawn on the number of resellers he expects to take on, but he stressed that he would be quite selective. “We’re looking for people who add value rather than volume,” he said, “and value is in the eyes of the end-user.”
The pressure seems to be on for Dell to make its new, indirect strategies pay off sooner rather than later. It released its Q4 results today and while revenues were up ten per cent, net income was down 6 per cent. Yearly revenue increased 6 per cent to $61 billion.
"While Dell continues to drive towards a world-class cost structure and competitiveness we have much work to do," said the eponymous Michael Dell. "Resurgent growth puts us on a strong footing to improve our cost position, scale expenses and enhance productivity across our business. I am confident that from this base we can continue to drive improvements in profitability."
Of course analysts were more concerned with how Dell was going to increase profitability, with particular interest in plans to trim headcount. In an analyst conference call, Dell's CFO Don Carty indicated that the ten per cent cull (over 8,000 jobs) it first suggested last May had proven difficult to achieve because they keep adding “frontline” people.
