In 1999 Michael Dell wrote his book “Direct from Dell”. He was 34 and one of the most recognised people on the planet. Back then Dell was just 15 years old, in May 2014 Dell will be 30 and I suggest that Michael Dell’s second book should be entitled “Indirect from Dell.”
The Dell story is certainly based on the “American dream”; an idea that started in Michael Dell’s university dorm grew to become a global multi-billion dollar business. Then it runs into challenges, (which global player hasn’t?) and then 6 years ago Dell decided to build a channel business. That’s not part of the “Direct from Dell” story, how Dell must have agonised over that decision, it is a dramatic change in direction and in a sense strikes a blow to the very reason so many people loved Dell.
Dell’s channel business is significant; it varies between 35% and 50% of its business depending on the region. This is pretty remarkable and a testament to how much an organisation can change, especially when you consider the scale of Dell. A complete change in direction like this takes time to develop and mature. As an established partner of Dell, and having experienced the frustrations of this somewhat schizophrenic organisation, it can certainly be tough for all involved. However, it’s working; certainly Foundation IT has a thriving Dell business, our revenues to Dell doubled last year.
Dell has never been just a “box shifter” there is so much more to the business than that. Dell innovated from the very start and has consistently adapted to use the latest methods – be that just in time manufacturing, automated process control or even the Internet. This is a company run by one of the most admired business men of our age. Michael Dell’s presence is everywhere; it is astonishing how visible and involved he is. It’s easy to forget that for many years Dell was not only the number one in its field, but also had the best reputation for service and delivery. There was a time when Michael Dell stepped into the chairman role that Dell may have lost its way somewhat. Certainly Dell has been hurt by the decline in volume last year and the gradual decline in margins from PC’s. However, Dell has bounced back since Michael returned to the CEO role and there is a strong feeling that taking Dell private will only mean good things for the future of the business.
Dell also listens, it is quite remarkable how much time you get to voice your concerns and ideas and this can be from anyone in the hierarchy. Last week I was lucky enough to meet with Marius Haas, Brian Humphries and Sam Greenblatt each who’d travelled some distance to be in the UK, as well as Dell’s UK Enterprise Solutions Director, Steve Holmes. Other than myself there were two other partners and this made for a fairly intimate atmosphere. Marius Haas is the President of Enterprise Solutions Group – he reports to Michael Dell and is responsible for worldwide engineering, design, development and marketing of Dell enterprise products, including servers, networking and storage. What I learned was interesting; among other things 87% of Dell’s clients only buy one line item. In a way that’s not surprising considering that Dell has made the vast majority of its acquisitions in the last five years, but what an opportunity as Dell matures these new products into its stack. Marius told us about the changes he is making and the innovation that Dell is going to bring to its now much larger product set. Interestingly Marius only talked about these things after being asked to by me, he and his team spent the vast majority of the meeting asking us (the partners) about our businesses and what we felt Dell could do better.
Foundation IT is the UK’s number 1 partner for EqualLogic, I think I may have mentioned that already, and this has happened because we are very good at what we do and have a number of years’ experience on that platform. Our success has come, as with all things, over time. We have an opportunity to expand our Dell revenues considerably as we become more familiar with the wider range of Dell products.
Thank you Dell for where you have helped us get to today, we appreciate the support. I am very excited about where our relationship and the market is heading. I’m sure Dell will continue to adapt, it certainly appears to be working and I can see the effect it has had on our success. This is good news for our clients who are looking for new ways to get things done and every single one of our Dell clients is very happy with the service and quality of product they receive from Dell. We are seeing a brand new Dell emerging and I think there is a lot to look forward to as a Dell employee, partner and client.
Author: Andy Sellers, Managing Director
Andy has worked in the IT industry for more than 20 years. Much of that time has been spent working with leading workflow and document management technologies such as Staffware (now Tibco), Lotus Notes, Documentum and Autonomy. Andy has spent much of his career running or helping other small innovative solutions businesses. He has a passion for go to market strategy, has instigated two management buyouts and been involved in raising funds, including an IPO. Outside work Andy is passionate about films and music and loves watching and listening with his wife Andrea, and children Max and Olivia.