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Dell and Dow - the wider context

Microscope contributor

Dell has sliced an entire management layer from its EMEA operation this week in a cost-cutting move that included the departure of UK channel director Andy Dow, who agreed to an exit deal and is expected to surface at a distributor in March.

 

As revealed first by MicroScope on Monday, Dow made a shock exit at the firm after only 14 months in the role, having used his long relationship with the channel to encourage 2,500 resellers to partner with Dell and set aside trust issues.

 

It is understood that the roles of 60 middle managers across EMEA have been put at risk of redundancy - six in the UK including Dow - as the vendor looks to cut its cloth accordingly given the slowdown in the market, especially in desktops.

 

"Dell is taking out a tier of management - they are shortening the chain of command which makes a lot of sense in the current environment," said a source close to the vendor.

 

This has led to an obvious kneejerk reaction, with the channel wondering if Dell is questioning its hybrid sales model, which is not surprising given the company's chequered history with partners and its previously long held belief in direct selling.

 

However, Dell has insisted that it remains committed to partnering long term as stated by former EMEA channel head Josh Claman earlier this month when he unveiled a restructure taking place across the organisation worldwide.

 

Dell has created four global customer units - Large Enterprise, SME, Consumer and Public Sector - and is combining its direct sales and reseller account teams to minimise channel conflict.

 

At the time, Claman anticipated questions from partners on what the structural overhaul means to them but insisted there was no need for concern.

 

"I want to emphasise that the new structure does not affect Dell's ongoing commitment to partners globally. We have worked hard to earn your trust," he said, adding that the resulting efficiencies and synergies would benefit all.

 

A spokeswoman at Dell insisted today that it remained to a future with partners, "nothing has changed at Dell to alter that status".

 

The channel operation will be run from the US by Greg Davis, who now leads global indirect sales but Dell resellers have been informed that Emanuel Mouquet, currently marketing director for southern Europe will lead the EMEA channel.

 

The success of Dell's push in the B2B market has been questioned by Ranjit Atwal, principal analyst at Gartner, who said it was difficult to see where the incremental reseller revenues were coming from.

 

"Dell grew 10% in the fourth quarter and most of the growth was driven by consumer mobiles. The professional desktop segment fell 20% but Dell declined 25%," he told MicroScope.

 

As the market continues to move aggressively to the notebook form factor, Dell has not been able to transfer the build-to-order supply chain advantage it had on desk-based machines to mobiles.

 

The only figures Dell has provided on partner sales last year revealed that the run rate had risen from $9bn to $12bn globally but it did not split the figure geographically or in terms of product segments.

 

It must also be hoped that in the year since Dell launched PartnerDirect to resellers in EMEA, it will have learnt how to operate a more effective and efficient channel that will leave enough margin in the pot to pay partners and appease shareholders.

 

More details will emerge from the vendor next week and as partners are only too aware, this is often where the devil resides.

Related Topics: Desktop PCs, VIEW ALL TOPICS

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