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Dell to channel: resistance is futile

Alex Scroxton

Michael Dell has said that Dell's portfolio has grown so broad that there is now "not a question" of whether or not resellers are going to have a relationship with it but "a question of when and how".

Taking questions at Dell's annual analyst event, the eponymous CEO said: "[We] have a set of solutions which are broad and comprehensive [and] brand and pervasiveness that is significant.

"They [partners] are often over-indexed to a certain other company in our space and so they see this as a diversification. That's absolutely helping us and we're pretty bullish in our ability to grow that.

"We now how over 100,000 channel partners [and] we're seeing very strong take-up of the complete stack," said Dell.

Dell said that a combination of incentivising its direct sales staff to drive more sales into the channel, as well as the 'acquisition' of partners through its purchases of specialist firms such as Compellent or SonicWALL, were strengthening the partner programme.

However, he added, the challenge that Dell now faces will be to introduce a lot of the disparate partner sets to the rest of its portfolio.

Dell bosses used this week's event to give yet another strong indication that they see a much diminished future in the company's traditional core PC markets as the firm announced its first quarterly dividend alongside a massive round of cuts, expected to amount to $2bn (£1.3bn) by 2015.

Dell said it would pay $0.08 per share per quarter, a dividend yield of 2.7% based on Monday 11 June's closing price of $11.86.

But the good news for its shareholders was tempered with talk of incoming cuts as Dell seeks to reposition itself as an end-to-end solutions vendor, with a particular emphasis on the datacentre software and services side, where it has been acquiring heavily.

The savings are expected to be made in a number of areas, with a particular emphasis on its sales organisation and supply chain, which may include moving some of its functions to less expensive parts of the world.

Dell said it will also wring out some costs from standardising on PC and server system configuration.

However, unlike rival HP, the 109,000-strong firm let slip no clues as to the possibility of redundancies.

"We are a solution company first, vertically focused, and creating more value for customers," said Michael Dell.

Transcript courtesy: SeekingAlpha


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