COLUMN: Is Dell Technologies’ Channel At Risk?

The Channel Company’s Robert Faletra says some recent decisions made by Dell Technologies are troubling and confusing for the company and the channel.

Politicians are often against something before they are for it. Or they are for it until they are against it. Or they are against it and for it, depending on which audience they happen to be addressing.

Dell Technologies, which for years was against the channel before it went all in and became very channel-focused, seems to be slipping into the third category.

It’s troubling and confusing and, frankly, not good for either the company or the channel.

A few weeks ago, CRN reported on Dell taking more of its client business direct and cutting partners out of some deals.

Some partners have told CRN they believe Dell is offering discounts of 1 percent to 2 percent for customers that move the business. That may not seem like a lot, but in a significant deal it can quickly add up to tens of thousands of dollars.

So what are Michael Dell and company up to? Well, when CRN interviewed John Byrne, Dell’s president of North America sales, and asked about the well-reported channel conflict, it didn’t really get an answer. “Here’s our channel strategy for client systems: We want both routes of market to grow—both direct and channel,” Byrne said.

He evaded questions about whether there is a directive inside the company to preferably take the business direct.

That’s not like Byrne, who historically has been a straight shooter and generally more than willing to answer directly. Byrne is also a hard-driving executive who executes on a directive. In short, you want him on your side.

So, what’s really going on with Dell Technologies and the channel? Which side of direct versus indirect is Byrne on? Would he rather see the direct side grow more or the channel grow more and, if all things were equal, which way might he nudge it? We don’t really know. The actions as reported seem to show the company prefers business go direct rather than through partners at the client level.

To really know what the company wants, you have to go up the food chain. Byrne has a big job but above him sits Bill Scannell, president of global sales and customer operations. Above Scannell is Jeff Clarke, vice chairman and co-chief operating officer. Clarke is a longtime Dell executive who has been a force in the company for many years. Scannell came into the organization via the acquisition of EMC, where he was a very successful sales executive back when EMC had arguably one of the best direct sales organizations in the industry.

Then there is Michael Dell who, of course, needs no introduction. He’s brilliant and has done an amazing job shepherding the company through untold changes in the industry since its founding in 1984. He was direct before he was indirect but once he decided the channel was important, he was focused on making it a great partner.

So where are we now? What’s the strategy and is it coming from Byrne, Scannell, Clarke or Michael Dell? Is what’s going on a short-term aberration or is it a longer redirect? Is this apparent direct push on the client side of the business going to move upstream? Will it ultimately entail the complete Dell product line?

Is a world where IT is increasingly being sold as a subscription driving Dell to move toward a different model?

Should strategic service providers that banked on a Dell business relationship defensively push business to its competitors? Should they be concerned Dell might completely pull out of its channel partnership?

These and many more questions come to mind, and someone higher up the food chain at Dell than Byrne ought to step forward and answer them. Otherwise the company is in danger of unnecessarily putting its channel relationship at risk, and that’s not good for anyone in this equation.