Image ”Courtesy of Dell Inc.”
The channel over the years has had a love hate relationship with Dell. The company has had its fair share of issues with channel partners in the past. Issues such as direct competition, channel conflict, and host of other not so channel friendly problems. Some of these practices have left partners of old with a bad taste for the hardware company and there are a number of these partners who have been very vocal about these experiences in peer groups, forums, and at trade events. On the flip side there are just as many partners that have loved everything about the company and are just as vocal to defend Dell in any forum.
In a memo to current employees released today by Michael Dell regarding his plans for a private Dell, the founder provided insight into what the future of Dell might look like if his deal with Silver Lake were to be accepted.
The memo outlined a number of strategic changes to the business, which included investing in R&D as well as personnel, and continuing to create a Converged end to end IT business model through acquisitions in infrastructure, cloud solutions, applications, and managed security solutions. On top of these investments Dell plans to invest heavy in the PC and tablet market with an emphasis on maximizing revenues rather than gross margins.
The big surprise may come in the excerpt from the memo shown here:
Hire additional sales personnel. Our goal is to increase sales coverage and expand the depth of partnerships with channel partners in our Partner Direct program. We also expect to significantly increase investment in training for both new and existing sales personnel, including our channel partners.
The note seems to elude that Dell is looking at Channel Partners in the same respect as its sales personnel, with an expansion of its overall sales force including its channel partner reach and providing additional training to partners and staff.
Expanding Dell’s Partner Direct program could be good for the Channel, but given the plan for Dell to create an end to end IT solution and service company, and given the marketing capabilities and Dell’s public brand awareness, small IT shops may have good reason to be concerned.
In a private Dell environment, with the company no longer having to answer to investors and Wall Street, and with the sheer number of service based acquisitions the company has already made, Dell very well could have a significant impact on local IT businesses. This has the potential of a Wal-Mart scenario for local shops that could easily be pushed out by the larger service based business based on it potential budget, marketing resources, and trusted services.
Whether any of this will come to light is still a question. With two seemingly better bids on the table for the company, and talk of Michael Dell being ousted from his CEO position in either of those two scenarios, the probability of this coming to light is plausible but definitely not certain.
