Partners are “switching allegiances” to Dell Technologies because of double-digit product line growth, healthy rebates and supply chain predictability, as the channel pursues aggressive market gains post-pandemic.
From India to New Zealand -- and all regions across Asia Pacific and Japan (APJ) -- the ecosystem is prioritising financial profitability and solution delivery above all else as markets emerge from the shadow of COVID-19 motivated by a desire to rapidly expand.
That’s according to Tian Beng Ng -- senior vice president and general manager of Channels across APJ at Dell -- who suggested that such a sea-change in partner approach -- following 18-24 months of unpredictability and difficulty -- has resulted in record-breaking channel revenues for Dell both globally and regionally.
“If you look at the market growth, we’ve had a really strong year,” said Tian Beng, when speaking to Channel Asia on the sidelines of Dell Technologies World in Las Vegas.
From a worldwide perspective, the vendor’s indirect business has grown US$21 billion within the space of five years, climbing annually from $38 billion in 2017 to $59 billion with FY22 numbers highlighting year-on-year growth of 27 per cent.
Closer to home in APJ, the channel business outpaced global figures to grow at 31 per cent during the past 12 months, triggered by double-digit growth across all product lines.
Notably, client sales increased 41 per cent while server and storage reported upswings of 39 per cent and 14 per cent respectively across the region -- the knock-on impact resulted in Dell paying out 42 per cent more rebates to partners.
“These are massive numbers in APJ,” Tian Beng noted. “We all know the reasons for client growth but the server business growth is particularly huge.
“There’s multiple factors behind this but one big sector that grew is web tech, which is understandable. During the pandemic, guess which business grew? Anything and everything connected to online. Everyone pivoted to online and because of that, web tech benefited.”
In addition to web tech, Tian Beng acknowledged that following a period of market instability in which businesses delayed decisions on data centre projects, such hesitation has been eliminated and deals are back on the table.
“We noted a resurgence which started during the first half of the year and that picked up pace during the second half and the spike is still going up,” he noted. “One area of the channel business which we are very happy with is that our partners are doing well, evident by us paying 42 per cent more rebates on a year-on-year basis.
“This is a good sign because our overall channel business grew 31 per cent but we paid out 42 per cent in rebates which shows that partners are making money across our portfolio in APJ.”
Product line growth triggers healthy rebates
Such sizeable partner returns are expected to continue in the months ahead with technology spending forecast to reach $1.04 trillion across Asia Pacific in 2022, at a growth rate of five per cent. According to IDC, customers are either increasing or maintaining investment levels despite concerns linked to supply chain, inflation, labour shortages and COVID-19 variants.
Spending is expected to span all aspects of the technology suite from devices to the data centre and to cloud -- a market dynamic Tian Beng believes best positions Dell partners for future growth.
“The more partners sell the right mix of products and more lines of business, the more we pay the channel in rebates,” he added. “This is positive and means that partners are becoming more end-to-end and adopting the right behaviour to win in the market.”
For Tian Beng, cross-sell represents the channel’s secret weapon with triple-digit rewards on offer for selling across the entire Dell portfolio, ranging from client, server and storage solutions to VMware offerings.
“We do have some client-only partners but that is a small monitory,” Tian Beng said. “The majority of system integrators understand that to survive in the long-term, they have to be selling into the data centre space.
“If they just exclusively sell the client product line, it will be very tough to survive. Perhaps in the more emerging markets such as Nepal or Bangladesh that approach could be feasible but for the majority, profitability is in the data centre.”
As markets bounce back at different paces, Tian Beng also outlined the potential of APEX -- the vendor’s as-a-service offering -- in helping partners capitalise on increased demand for data centre solutions delivered via a subscription-based model.
“It’s early days but the whole consumption model change is really taking off across the region,” Tian Beng said. “We believe that our APEX offering is differentiated because we can provide this service in an end-to-end capacity. We start with enablement and we’re adding product lines as we expand.”
As noted by Tian Beng, two APEX offerings currently exist in the market -- Custom and Outcome.
“Custom does exactly what the name suggests in that it’s a customisable offering which is designed from scratch,” he explained. “The offering is Flex-on-Demand and Custom is available now in Singapore, Australia, India, Japan and Korea -- we have this solution already rolled out.”
Meanwhile, Outcome again follows the name implication and is centred around delivering an outcome-based solution aligned to specific customer requirements.
“For example, they can enter the APEX Console which allows customers to click on environment, bandwidth and capacity features and then buy that service based on the outcome,” Tian Beng said. “This is only currently available in Australia and Singapore but we’re rolling out more.”
Specific to consumption-based selling, Dell also introduced managed services for cyber recovery to an expanded APEX portfolio, supported by enhanced partnerships with Microsoft, Amazon Web Services (AWS) and Snowflake targeting public and multi-cloud environments.
Under the banner of Dell APEX Cyber Recovery Services, the move is the first in a series of new full-stack solutions set to be housed within the vendor’s as-a-service suite of products, with the aim of simplifying business recovery from cyber attacks.
Specifically, Dell will manage the “day-to-day” cyber recovery vault operations and assist with data recovery, backed by standardised configurations and expertise from nearly 2,000 isolated vault solutions deployed globally.
“We’re seeing a security skills mix across the channel,” noted Tian Beng, when referencing the market potential of pivoting into security. “But this is top of mind for partners because of the environment and we’re seeing more focus on cyber security and cyber resiliency.
“Partners want to start selling cyber now and if they don’t have the skill sets, they can work with us to help get started. For example, one partner recently rolled out one of our largest cyber resiliency projects in the Philippines so we’re seeing strong examples across the region.”
Supply chain predictability wins deals
Despite the allure of increased customer investment and heightened cross-sell opportunities, the market in general remains hampered by ongoing supply chain disruptions as shipping delays and back orders scuttle project progress.
Unsurprisingly, vendor superiority in the supply chain is providing an attractive drawcard for a customer and partner base roadblocked by lengthy processing times and delivery dates.
“We are able to accurately predict the lead times a lot better than our competitors so I would say yes, our supply chain is definitely helping us win deals,” Tian Beng said.
“When new partners come over to Dell that haven’t worked with us in the past, our goal is to obviously keep them and motivate them to continue to do business with us and increase market share.”
According to Tian Beng, the channel growth achieved during the past 12 months is directly linked to current partners cross-selling to expand investment opportunities, in addition to new providers joining the vendor’s network in authorised and gold status capacities.
“They have switched allegiances and we want to ensure we keep them in the Dell ecosystem,” he stated.
In looking ahead to FY23, Tian Beng cited three key focus areas as mission-critical to the vendor’s channel success -- transactional, transformational and experience -- with a desire to focus on winning table stakes business, changing the game and enhancing experience levels.
“Transactional in focusing on running the business and selling more devices, storage, servers and modernising the data centre,” he noted. “This is more table stakes business that we need to do to ensure we continue growing and outpacing the market.”
The next pillar is transformational which centres on “game-changing” initiatives such as APEX, in addition to heightened focus on independent software vendors (ISVs) and cloud service providers (CSPs).
“These new initiatives will really change the market during the next few years,” Tian Beng said. “The results may not be immediate -- which is why we need the transactional element of the business -- but these efforts will change the game.”
Specific to experience, Tian Beng referenced a simple objective; “to make it as seamless as possible for partners to do business with us”.
“It’s a key aspect of working with the channel and one of the most consistent pieces of feedback we receive from partners,” he outlined.
“How can you make it easier for us to do business with you? We are constantly working on addressing that feedback, for example, providing quotes quicker or providing self-service tools to eliminate the need to speak to a Dell rep, instead partners can just log-on and source they own quotation and place an order.”
James Henderson attended Dell Technologies World as a guest of Dell.