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Dell partner sales see 6% dip, but optimism remains intact
Dell continues to push for partner sales growth amid a tough economic situation. Dell partner orders declined 6% in the vendor's second quarter, leveling out the 6% gain in Q1.
While navigating the difficult COVID-19 economy, Dell Technologies has identified positive trends within its partner community amid a drop in second-quarter sales.
Following the Aug. 27 release of its fiscal year 2021 second-quarter earnings, Dell Technologies said it has maintained solid momentum in channel partner activity over the course of the pandemic. That activity hasn't always translated into channel sales growth, however. After channel sales grew 6% year-over-year in the first quarter, Dell's channel sales dropped 6% in the second quarter.
"For the half, we are flat," said Cheryl Cook, senior vice president of global partner, embedded and edge solutions marketing at Dell, in an interview. "I think given the uncertainty and given the dynamics that everybody is navigating, we will actually take that as rather positive."
Cheryl Cook
Cook said that Dell's message to its partners hasn't wavered within the unprecedented business environment: Dell partners should focus on acquiring new customers, displacing competitors and complementing the vendor's direct sales coverage.
She noted that partners delivered almost 16,000 net-new customers to Dell in the second quarter and more than 31,000 net-new customers for the first half of the fiscal year.
Value in upselling, cross-selling
Cook said second-quarter Dell partner performance provided further evidence to reinforce the company's long-standing belief that its portfolio enables strong cross-selling and upselling opportunities. According to Cook, Dell partners that sell three lines of business -- storage, client and server products, for example -- grow 12 times faster in revenue than partners selling just two lines of business, and 45 times faster than those selling one line of business. Meanwhile, partners that sell three lines of business in addition to VMware products typically grow 138 times faster than partners selling a single line of business, she said.
Not only does selling multiple lines of business "drive more revenue, but I think it helps partners engage in stickier, more strategic, consultative types of engagements and projects with their customers," Cook said. "The richness of the portfolio … can allow a partner to simplify the number of vendors they do business with, engage in much broader parts of the solutions they would be pursuing and projects that they would be engaging with, and certainly provides a rich services opportunity around [the] core platform."
Demand for training, financing options
Dell has seen "a tremendous appetite" among partners for training and certification over the past six months, Cook said. She said Dell delivered more than 40,600 credentials in the second quarter to about 2,600 partner companies. Partners earned about 56,000 credentials for the first half of the year.
The uptick in training has been driven in part by Dell partners looking to shore up their credentials during the pandemic, Cook said, as well as by the spree of product launches in the second quarter, including PowerStore and PowerFlex systems. With the product launches, Dell has rolled out new sets of training.
Cook said Dell's financing arm, Dell Financial Services, has also seen growing interest from partners. Dell Financial Services originations increased 40% in the second quarter and 22% for the half. She said the demand reflects how the current market is spurring customers to adopt more flexible consumption models and cloud solutions. Dell Financial Services released a series of tools and financing offerings for partners and customers in the early stages of the pandemic.
Dell Technologies World, the vendor's annual user conference, will be presented in a digital format next month, Oct. 21-22.
Dell appoints new channel chief
In August, Dell Technologies introduced Rola Dahger as its new global channel chief. Dagher is a former Dell executive who left the company in 2017 to serve as president of Cisco Systems Canada. Dagher succeeds Joyce Mullen, who announced her departure from Dell in July.
