Heightened channel focus pays healthy dividends for Dell

During the first quarter of FY22, overall order revenue via the channel increased 15 per cent year-on-year in APJ, with distribution reporting a 19 per cent rise in deals.
Rola Dagher and Tian Beng Ng (Dell Technologies)

Rola Dagher and Tian Beng Ng (Dell Technologies)

A commitment to enhance partner experience levels and build services-led go-to-market strategies -- aided by new incentives and distribution support -- continues to pay healthy returns for Dell Technologies following a “solid quarter” of channel growth across the region.

During the first quarter of FY22 -- spanning 1 February to 30 April -- overall order revenue via the channel increased 15 per cent year-on-year in Asia Pacific and Japan (APJ), with distribution reporting a 19 per cent rise in deals.

Server orders spiked 28 per cent during the three-month period while client solutions rose 18 per cent compared to FY21 figures. Notably, continued server demand placed the regional ecosystem ahead of global momentum with the vendor’s worldwide indirect server business growing 12 per cent year-on-year.

“We’re seeing a resurgence in the market,” noted Tian Beng Ng, senior vice president and general manager of Channels across APJ at Dell. “A lot of customers delayed data centre investment decisions last year and diverted the majority of funds and priorities to client devices due to work-from-home but those projects are returning."

Such market observations mirror analyst expectations with technology spending forecast to reach approximately $950 billion across Asia Pacific in 2021, increasing 7.1 per cent in response to the deployment of widespread “digital resiliency” plans.

According to IDC findings, organisations are “rapidly adapting” to pandemic-inspired disruptions by leveraging digital capabilities to restore operations, underpinned by infrastructure and business model overhauls. With spending expected to surpass the trillion-dollar mark by 2025, enterprise customers are revisiting and upgrading business plans at speed and scale region-wide.

“Organisations are bracing themselves to have a smooth transition post-pandemic,” said Mario Allen Clement, senior market analyst at IDC. “As vaccinations gather pace in the region, organisations across industries will focus their efforts to have a hybrid business model. Innovative products and customer satisfaction will be key to continued operations.”

In response to a pendulum swing in customer approach, the channel is up-skilling at pace with partner enablement and training now a leading priority for an ecosystem built on the foundations of technical expertise and specialisation.

And Dell is no different, reporting a 75 per cent increase in Proven Professional certifications during the first quarter compared to the same period last year across APJ, with 195 certifications completed. Underpinned by partner focus on PowerStore, VxRail and Unity solutions, the region is outpacing global (65 per cent) in relation to channel certifications.

“This is our strongest first quarter performance of the last eight years,” added Tian Beng, when providing a regional overview to Channel Asia. “We have provided training for more than 1700 people.”

This has been backed by “historical attendance” at the vendor’s Heroes Program -- a foundational initiative targeting partner pre-sales roles -- which reported a three-fold increase in engagement, rising to 8332 in FY21 from 2891 in FY20.

“Partners are rightfully investing in ensuring employees are trained,” Tian Beng said. “The COVID-19 support package -- which we launched in April 2020 -- also helped because we waived some of the fees related to training and exams which resulted in a surge of partners getting certified.”

Enhanced experience, accelerated services adoption

With more than $54 billion in order revenue delivered via the channel during the previous 12 months, Dell has started FY22 strong with a worldwide 14 per cent indirect booking increase during the opening quarter.

Specific to technology, this translated into global order revenue growth via the partner ecosystem with increases across client (21 per cent), server (12 per cent) and storage (three per cent) business units.

“We have been simple, predictable and profitable but we soon realised that we need to be more simple, more predictable and more profitable and the only way to achieve that is by working together with our partners,” said Rola Dagher, global channel chief at Dell.

Within this context, Dagher -- appointed to the role in August 2020 -- cited improved partner experience levels as a leading contributor to driving increased channel growth, acknowledging the need for ecosystem personalisation post-pandemic.

“We live in a world in which experience and personalisation is everything,” Dagher stated. “The pandemic has taught us how important technology is but technology is the enabler, we view partners as the true transformers.

“Our number one aim is making it easier for partners to do business with us. We are raising the bar with automated tools and processes, building a partner program of the future with partners alongside every step of the way.”

For Dagher, the concept of experience also dovetails into plans to accelerate adoption of “best-in-class” technologies through consumption models, primarily Dell APEX -- a new offering of managed storage, server and hyper-converged infrastructure.

“Doubling down on this position is a focus,” Dagher confirmed. “We sourced substantial partner feedback before launching APEX and the response has been great so far -- we’re pleased but not satisfied.

“We’re continuing to work on enhancements because while the launch in the first quarter was strong, how do we now make that better in the second quarter and the second half?”

In short, Dagher said APEX allows partners to “unlock” new recurring revenue streams to increase customer loyalty, aligned to the belief that end-users prefer to buy rather than build.

“Customers require turnkey solutions,” Dagher outlined. “They want to buy and our approach is providing consumption flexibility which mirrors a cloud-like experience. This represents up to 30 points from the outset that partners can benefit from and the channel is increasing adoption."

Despite the direction of travel, Dagher was quick to stress that the fundamental element of the approach is anchored primarily in the business model -- “we’re not jumping in with everything and anything as-a-service”.

With storage-as-a-service representing a natural extension of current offerings -- aligned to APEX Flex on Demand solutions -- plans are in place to roll-out capabilities in a phased and structured manner, aligned to “flawless delivery”.

According to IDC, 61 per cent of enterprise customers plan an aggressive shift towards paying for infrastructure on a consumption basis. By 2024, half of data centre infrastructure will be consumed as-a-service.

“Maturity across APJ is of course different but we see Australia, New Zealand and Singapore as the most mature in terms of cloud consumption, which naturally makes these markets key focus areas for APEX,” Tian Beng added.

“ASEAN is a little different because the approach does vary in markets such as the Philippines and Vietnam, which may result in a more localised APEX offering to ensure we meet local requirements. India is a huge market for Dell and while closer to ASEAN in terms of adoption, this requires a unique approach. We also work closely with CSPs [cloud service providers] which is another strong route to market in APJ.”

Seizing the sustainability moment

Another key priority for the wider channel team across Dell is activating partnerships to drive sustainability and inclusion goals, with APJ taking a lead role in spearheading change via the channel.

According to Dell research, 94 per cent of IT executives consider social impact when making investment decisions with 95 per cent of the vendor’s top customers now including social impact criteria in request for proposals.

“Clearly, social impact matters,” Tian Beng confirmed. “We are aware of the growing importance of social impact and want to support our partners as they continue to find unique ways to engage with customers and drive their businesses forward.”

To facilitate such change, Dell has modified MDF Spend Guidance procedures to allow charitable and non-profit activities to be carried out in local communities, aligned to the technology giant’s 2030 moonshot goals.

Partners can work with non-profits / charities to execute in-person or virtual events / initiatives that support and align with the Dell brand -- approved non-profit organisations are eligible for reimbursement via MDF.

“All of us have a role to play in giving back to the communities we work and live in,” Tian Beng added. “No single group alone can resolve the wide-ranging societal challenges. By involving our partners across our efforts, we can collectively grow opportunities in the digital economy for a better future.”

In assessing the regional ecosystem, Tian Beng acknowledged that partners represent “important touch points” for customers when generating creative approaches and solutions for market differentiation and growth.

“The next few decades will offer exponential progress,” he observed. “With everyone included in this digital era, we can harness the opportunities to apply technology in the most meaningful ways, such as providing individualised healthcare, giving access to STEM-related education, helping people build their skills, careers and businesses.”

One such partner is Fujitsu in Singapore, who leveraged the social impact drive to collaborate and invest in joint sustainability activities with Dell, such as coastal clean-ups and heritage walks incorporating litter picking in the community.

“Fujitsu is no stranger to driving sustainability initiatives with our customers and partners,” outlined Elson Chia, vice president and head of delivery at Fujitsu Asia. “Businesses and consumers are awakened to a greater sense of purpose and meaning. It is no longer the case for companies to deliver only on profits. Individuals now want to be part of the journey to positively influence the communities and environment they reside in.”