As Dell took the opportunity to highlight its channel strategy to partners in Berlin last week, Aongus Hegarty, VP EMEA, told Comms Dealer's sister publication IT Europa that the company is looking to utilise its pan-regional distribution relationships to expand its reach in the SMB and consumer markets.
Dell currently ships around 40% of its overall EMEA sales through the channel, and expects distribution to increase 50% year-on-year in 2015. While the main goal is to increase Dell's customer base through the channel, Hegarty claimed distribution is also beneficial to its reseller partners. "A lot of that growth will come from building out a more significant distribution footprint, particularly in Western Europe. It will also give flexibility to partners that we're dealing with in [Dell] PartnerDirect to now have their business flow and be fulfilled through distribution."
But to reach its target of 30% year-on-year growth in channel sales this this year, Dell needs to grab more share in the SMB and consumer markets. "You'll see us build up more capability to reach into small and medium businesses with a lot of our products and solutions that we haven't been reaching today. So a lot of that growth and expansion will come from those areas and into the segments of customers we've been less represented in the last few years."
Referring to recent industry consolidation and restructuring news in the supplier space, Hegarty also said the UK market especially is representing more opportunities to gain stronger footing in those key growth markets. "If you look at the UK, we have a very strong presence in many business lines within that market. But also significant opportunity to grow and develop with this consolidation taking place in the PC business. There's companies exiting and selling off other elements of their business. The opportunity there for us is to grow and expand through distribution, I'd say broadly across the market but particularly into the small and medium business and to consumer segments."
While Hegarty was keen to emphasise Dell's localised approach, pointing out the firm hasn't got central headquarters and operates an 'in-country' model, the vendor has recently adopted a different strategy with distribution. "Over the last few years we've started to look at how we could have more multi-country, pan-regional distribution relationships. So we signed an agreement with Ingram Micro first and then Tech Data in the middle of last year where we would look at rolling out pan-European distribution relationships and that's been rolling across Europe."
The roll-out is expected to complete by the end of the year. Although the programme is in many countries adding to an already existing distribution network, Hegarty said the vendor doesn't see a conflict. "It's not that these are replacing relationships, it's complementing them, it's adding to the breath of our coverage and the breath of our reach in the marketplace."
Looking forward, Hegarty says Dell expects to add to the over 4,000 global partners it now has this year. In EMEA the vendor is also acquiring new staff as part of its investment plans. "This year we're investing with probably up to 400 to 500 people added into our organisation just from a sales, channel and from specialist perspective net incrementally. So quite a significant, 15% incremental investment in our headcount and specialist resource."
With security as Dell's current key theme, it is understandable the vendor has been making a lot of noise about the increasing number of its partners gaining security certifications (up 41% last year). However, it will be interesting to see if the vendor will look to partner with ISVs and other channels as well in the near future.