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As Dell looks to close its pending EMC buyout, the company has reported that its channel strategy is gaining momentum.
Speaking with SearchITChannel, the vendor's channel chief Cheryl Cook highlighted the inroads made during the first quarter. She also spoke to Dell's divestment of the software side of its business and the integration of Dell and EMC's respective channel communities under one partner program.
Dell's global channel revenues, which currently accounts for more than 40% of the company's overall revenue, are building, Cook asserted. "We're growing in the channel at about three times the rate of the market right now. We've been sustaining that kind of momentum and growth for probably the last consecutive eight to 12 quarters," she said, adding that Dell is seeing double-digit growth in North American distribution, as well.
Cook also noted that deal registrations are up 30% year on year in North America. As a consequence, Dell is paying out more rebates to its partners, with payout increasing 48% year on year. "We had over 43,000 deal registrations in North America, and, globally, they're up 20% year on year -- over 120,000 deal registrations just in [the first quarter] alone."
Dell introduced new partner incentive structures that aligned to its different business units and portfolios, such as its client and traditional PC business and enterprise business, which includes servers, storage, networking, software and services. "Our client rebate payments grew 95%, and, in software, our identity and access management [IAM] payouts were up 150%," Cook said. She cited market research firm IDC's April 2016 report that revealed Dell had overtaken Hewlett Packard Enterprise (HPE) as the No. 1 vendor of PCs in the U.S for the first time since 2009.
The New Business Incentive (NBI) for rewarding partners for competitive take-outs and new logo wins was one of those new incentives. In North America, Dell had 2,000 partners receive the NBI benefits, with more than 1,100 of those partners eligible for the rebate. As a result, Dell saw 25% growth year on year in new customer revenues. "We set our ambitions on really wanting to expand in new customers, so the NBI performance … for at least the first quarter we've had it launched, I'm pretty pleased with that level of engagement," Cook said.
Channel training and certification has also seen greater uptake among Dell partners, a top priority for Cook. In North America, participation in training went up 24% year on year. "We're also seeing our core client competencies, which are somewhat new, grow 37% quarter on quarter and 46% globally," she said.
Additionally, Cook reported solid growth of Dell Financial Services, which allows partners to offer end-user financing. "We've seen a 32% growth year on year, where we originated just under $1 billion in financing, which in [the first quarter] was up to 1,800 end-user engagements or contracts to … fuel that growth," she said.
Divestment of Dell Software Group
On Monday, Dell announced it signed a definitive agreement to sell the Dell Software Group to private equity firm Francisco Partners and Elliott Management Corp. Cook commented on the role of Pete Koliopoulos, who in May was appointed as vice president of global software channels and alliances at Dell Systems and Information Management Group, as Dell sells off its software business.
"[Koliopoulos is] working collaboratively with us in championing the overall software programs as they integrate into PartnerDirect," Cook said. When the Dell Software Group transaction is completed, Francisco Partners and Elliott Management will "have a leadership team inclusive of [Koliopoulos] that will continue to work with those partners that resell the portfolio of our software products and assets, as well as [with] Dell."
Cheryl Cookvice president of global channel sales and alliances, Dell
Dell Software's portfolio spans everything from advanced analytics, data protection and endpoint systems management to IAM, Microsoft platform management, network security and performance monitoring. The Software Group also includes Quest Software, which Dell acquired in 2012 for $2.4 billion, and SonicWall, acquired the same year for an undisclosed sum.
Dell-EMC merger: Partner program changes still under wraps
Cook said she expects Dell will complete the EMC buyout sometime between July and October. Integration activities are "well underway right now," but she suggested Dell won't reveal any partner program changes until February, the beginning of Dell's fiscal year. If Dell closed the EMC buyout this summer, the two companies will "operate in parallel for a period of time."
At May's EMC Global Partner Summit, EMC's Senior Vice President of Global Channel Operations Gregg Ambulos told SearchITChannel that the post-merger partner program would maintain EMC's centralized global channel structure. Additionally, the two vendors would cherry-pick features of the respective partner programs for the unified program's design.
While Cook didn't state the post-merger program would follow EMC's channel structure, she did echo Ambulos' description on the integration process: "I would envision we're going to bring the best of both [programs] to bear. We'll have a common framework … [and] a unified program, but we'll sort through how we can keep the best-in-class capabilities to provide a seamless, simplified experience for our partners -- but tailor it and have it be as relevant to each of those businesses as possible."
Peruse our ultimate guide to Dell's EMC buyout.
Q1 2016: HPE bucks the trend of storage revenue declines.
Read Michael Dell's take on the Dell-EMC merger.