Dell EMC is a very special organization when it comes to delivering unique value proposition for its channel community – the company’s innovative spirit is empowering its engagement with channel community, helping them do more with less and in the way, secure their future growth prospects.
Tian Beng Ng, Senior Vice President and General Manager Channels APAC, Dell EMC interacts with Zia Askari from ChannelDrive.in about the company’s channel strategy and how it is driving innovation across four different transformations happening in the ICT domain today.
Tian Beng Ng, Dell EMC
How do you define the three priorities that you have in the market today?
There are a number of priorities, but before that, let me just give you a quick update of how the company is doing. It’s quite an interesting time because we have finished our first full year since the integration of the company. If you recall, we have integrated our company about 2 years earlier. But last year was the first full financial year of our company. So we are happy to update that the results were really strong for a full year. Just to give you some numbers about our global channel business for the financial year ending 2018 i.e. last financial year where we had really strong business.
In the financial year, our revenue for the channel globally showed a 12% growth year over year. Specifically if you look at the different product that we have, our client business grew 15% year over year. So that’s definitely an area where we want to do a lot more. But if you look at the overall business (Dell Technologies channel) for us last year, we were close to about $43 billion US dollars.
So, according to you, what is the key here?
I just want to say that these results are much better than what we ever expected when we did the integration of the company. And the results are so good because the message of our company is really resonating very well. Again, in the IT industry, there’s no company out there right now that has such a complete portfolio.
In fact, many of the companies in the industry have taken the opposite strategy of selling off different businesses, and actually becoming smaller companies. There are more focused in one or two specific areas of the IT industry. But for us, our strategy is a bit different.
We really want to be the essential IT solution provider with an end-to-end portfolio. Our portfolio structure is from desktops to notebooks on the client space, all the way to the data centre, with servers, storage, networking, you can see that our portfolio is really broad. And I think that message is going really well with our customers.
That’s because customers who were previously just working with Dell, are now in fact buying our storage products. It used to be from EMC. Similarly, we have lot of EMC customers in the past, who are now buying our Dell products. We call it Dell EMC now, the combined entity. It’s all one company now.
So you can see that the rationale of our integration is actually bearing fruit now because lot of our customers are beginning to cross sell across different product lines. So I think that’s going very well, and helping to fuel the growth that we see. But the good news is that the momentum that we saw last year is in fact, even growing faster this year.
If you look at just the Quarter 1 results, and again, this is all IDC data, the Q1 results were one of the strongest results we ever had. And that’s why the strong results last year has really continued into the Quarter 1 for us. Quarter 1 IDC results show that for servers, we actually became No. 1 worldwide in both units and revenue. In fact, we were already No. 1 in units. But in Q1 we became No. 1 in revenue as well.
And that’s important because it means that we are not only seeing many units of server, but we selling servers of a higher price band, a higher value as we are now No. 1 in revenue share also, including the unit share. So that was for Quarter 1. And then the other big news we had is that our storage performance which I mentioned last year, frankly wasn’t as good as we wanted it to be. But for Quarter 1, this year we had really a fantastic performance. Our share was 32.9%, which was No. 1 globally. And because of the strong performance at 32.9%. And then even if you combine the 2nd, the 3rd and the 4thvendor, in terms of their share, we’re still larger. So we had a really successful Quarter 1 on storage performance, and we’re definitely more committed.
This $43 billion, is it likely to go up?
Frankly, we haven’t set a specific number. As per our strategy, we believe that its upto our customers in terms of how do they want to purchase from us. We have an Omni-channel strategy. Omni-channel means that we let the customers decide if they want to purchase directly, or they want to purchase through the preferred channel. So it’s really up to them, right? But again, as I mentioned, very strong server performance, very strong storage performance, and then on the PC side we continue to grow very well. In fact, Quarter 1 was our 21 consecutive quarters that we’ve grown year over year, in terms of share. Again, PC has continued to do very well for us.
Today if you look at the organization, how well do you look at innovation, and what innovations are being driven by Dell Technologies in each of the segments that you are operating in?
Innovation is obviously a really important area for us because in the technology world, innovation always differentiates our solutions. In the area of innovation for example, in the last 3 years, we have actually spent $12.7 billion in R&D, which is one of the largest in the tech world. In fact, per year now, in R&D we spend $4.5 billion; every year in R&D. That is really multiple times of our other players in the IT industry. We actually have 23,000 patents and applications.
The fantastic thing is that we are bringing all those expertise to the combined company now; to the new Dell EMC, Dell Technology family now. All that expertise that we have, that is really well known on the Dell side, we have brought to the new company now. And that means our supply chain is obviously very strong, and that brings lot of value to our customers and to our channel partners. Our channel programme that we have designed and launched, has brought a lot of value to the partners.
But in the areas of our incentives, in the area of rebates, in the area of training and enablement that we do, we really think that it’s best in class. Again, I think it’s pretty fortunate, right? That’s because about 2 years back we had the opportunity to bring these two big companies together, and we actually created the Dell EMC Channel Programme, basically from scratch.
Today, what is so special about Dell Technologies that channel partners should be looking up to associating with?
I think the key differentiator why channel partners would definitely want to work with us is that we are quite unique. If you look at the in the IT industry as I mentioned, we are the only company that has such a strong portfolio, end to end. And if you look at our customers, everyone is going through this whole transformation. You hear a lot about the word ‘transformation’ happening in the industry.
Digital transformation is so big today, it’s happening everywhere, in all the segments and all the verticals. How do you look at this trend?
We believe that digital transformation obviously is one of the most important, but it’s not only digital. There are three other transformations that are happening, if you look at the industry. There’s digital transformation that’s happening, and that is the most important. It usually involves changing the business model of the company.
You have companies like Uber, Facebook, Paytm…all these companies have really revolutionized the business model, and they obviously went with digital transformation. More traditional companies have made their applications to the cloud, or made it easier to gauge with their end customers. So this is around digital. But besides digital, there are three other important transformations. The second one is IT transformation. IT transformation is more around the infrastructure. How you modernize the infrastructure, and how you lower the costs on infrastructure.
The other one is actually workforce transformation. Workforce transformation is actually where it’s concerning the end user devices. So whether it’s your smart phone, tablet, notebook or desktop, all these devices need to be managed and need to be secured. The applications on these devices need to be made so that folks can basically work from anywhere. Everybody’s working from the office, from home, from any location.
And the final one is Security Transformation, as the term implies, it’s around security, and security obviously is key. Now-a-days, the number of threats that happen, every other day there’s a big data breach, right? Frankly, it’s just figuring out how to prevent the breach. In fact, most of the organizations are not so much preventing them.
It’s how to minimize the breach when it occurs, because it’s not a question of preventing, it’s just minimizing it because a breach will happen. In the old days, many years ago, everyone was trying to make sure there were zero breaches. But I think now, we all understand that it is impossible. There will be breaches. It’s just a magnitude and how you contain it. So again, four transformations, and I mention. And why would channel partners want to work with us is that there’s no other company that’s able to address all these four transformations.
How are you taking this wonderful message to the channel community, and how are you handholding them?
It’s an important process. We are doing lot of events, lot of enablement to train our partners. But honestly, it is important that, while we can do all four transformations in a company, but honestly, the partners may not be able to do all four. So we educate them and tell them our capabilities on doing all four.
But it’s really up to the partners. Yes, there are some channel partners that can do it really well, and do all four well. But some of them may not. In fact the smaller ones would probably want to focus on one or two, or maybe three; it’s up to them. But we are able to do all. We have a very robust process where we communicate, do events, we do certification, trainings, etc.
And in terms of numbers, can you share the number of total partners that you have in this region? And what is the kind of growth and engagement that you are looking at?
We have about close to 700 ‘metal tier’ partners. ‘Metal tier’ means that they are given metal tier status. We have three tiers of partners. One is what we call Titanium, the other one is called Platinum, and then Gold.
Close to 700 across APJ. Of course, we have thousands of other partners, what we call ‘authorized resellers’, and these buy through distributors. So in India lot of our authorized resellers would buy through Redington, through Ingram, some of our distributors.
So today, how do you look at technology? For instance, what are some of the key technologies that you see are going to play an important role, not only for the enterprise, but for the channel partners and for you as an organization?
I think there’s no secret there. There are lot of people talking about the keys of technology trends now that’s happening. Obviously, Big Data is obviously huge. Digital city, as sort of a vertical, is also a big area. Then we have VR in addition to AR. Augmented Reality, Virtual Reality.
Tell us something about your Indian operations? How do you look at the channel performance here, and what are your expectations from here?
I think India has definitely been one of our best performing regions for us. I think we’re very optimistic that the business will continue to grow really well. I think last year was definitely one of the best performing regions, if I look at the APJ region.