Dell Technologies is reporting channel partners either brought in or reactivated 17,000 customers in the third quarter as the channel continues to play a larger role within a company that was once famous for its reliance on direct sales.
In addition, Dell has also revealed Marius Haas, president and chief commercial officer at Dell Technologies, is retiring next month. His responsibilities will be assumed by Bill Scannell, president of global enterprise sales and customer operations with both indirect and direct sales organizations reporting up to him.
In its most recent third quarter, Dell reported revenues of $22.8 billion, a 2% increase year over year. The company reported an operating income of $836 million. Compared to a loss of $356 million a year ago. Much of the revenue being generated by Dell is being used to pay down existing debt from acquisitions.
Dell channel partners are being credited with driving $52 billion in order so far this fiscal year, with more than 52,000 net new customers landed by channel partners driving a lot of that growth, says Cheryl Cook, senior vice president of global partner marketing for Dell.
Overall, Cook says the channel business grew 8% on a year over year basis for the quarter, and 4% for the year to date basis. Client device sales via the channel increased 8% in the third quarter and 7% year to date, while storage sales rose 4% in Q3 and 11% year to date. Server sales for the quarter dropped slightly. However, on a year-to-date basis, server sales through the channel are up 7%, says Cook. In its third quarter results, Dell reported server and networking revenue decreased 16% to $4.2 billion.
The one caveat in those results is Dell accounts for the sale of some hyperconverged systems as storage rather than server revenue. Dell reports for the third quarter that storage sales increased 7% to $4.1 billion.
In general, Cook notes Dell partners that sell more product lines continue to be more successful than those that don’t. Partners that sell three lines of business generate approximately nine times more revenue than partners selling two lines of business and 31 times the revenue than partners selling a single line of business, Cook said. Partners that sell three lines of business in addition to VMware products generate 103 times more revenue than partners selling three lines of business. VMware, which is now owned by Dell outright, is pulling a lot of Dell infrastructure sales via the channel, notes Cook. VMware reported revenues of $2.5 billion for the third quarter, an 11% increase.
In terms of training and certification, partners earned about 16,000 credentials in the quarter. Year to date, Dell has issued nearly 62,000 credentials to partners. That level of activity suggests the investment partners are making in attaining certifications are a barometer of future sales opportunities, notes Cook.
“We see partners leaning into credentials,” says Cook.
Of course, in the wake of Dell starting to rely more on consumption-based pricing models to deliver infrastructure as a service, the coming year promises to be an interesting one for channel partners. It’s not clear what percentage of the Dell channel base is prepared to transition to a recurring revenue model. Whatever the path forward, however, the one thing that is clear is that despite to rise of the public cloud, demand for on-premises IT infrastructure appears to remain robust.
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