A Year Later, Dell Continues Channel Commitment

Just more than a year after pledging a major channel push, Dell Inc. -- the standard-bearer for direct sales -- continues to invest in its partner program, increasing both partner ranks and channel-related revenues.

Chairman and CEO Michael Dell first said publicly in May 2007 that his company was committing to the channel. The company followed that announcement in December 2007 with the formal launch of its new PartnerDirect program in North America. In the first few months of this year, the company expanded PartnerDirect to its Asia Pacific/Japan region.

"Since we launched the program in the United States in [Q4], we've added over 3,500 new global partners," Michael Dell said during an earnings call on May 29. "And our channel business is now on a $12 billion run rate."

There was little mention of the channel revenues in Dell's investor releases, which focused on topics of greater interest to shareholders: the overall plan to restore the company to strong profitability and market-share leadership. For its first quarter, Dell improved revenues 9 percent over the year-ago quarter and a reported 12 percent increase in earnings.

The 3,500 new channel partners join about 30,000 Dell channel partners worldwide. In late 2007, Dell also said that channel revenues already accounted for about $9 billion of the company's approximately $60 billion in annual revenue. If the new run rate of $12 billion is maintained, Dell is on track for at least 33 percent growth in channel revenues.

The company hosted a newly formed Partner Advisory Council at its Round Rock, Texas, headquarters. Among the participating Dell executives was Michael Dell himself, who told the group: "This is not an experiment. What we want to do over the next three to nine months is better understand the capabilities of our partners."

On May 22, Dell launched the Dell Channel blog. Among its entries is a Q & A with Greg Davis, a channel executive.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.