The Power Of Dell Technologies: Fueling The Future For Partners

In these unprecedented times, Dell Technologies’ focus is on ensuring partners and customers have what they need to forge ahead. Fueling that future will be the company’s new next-generation Power-branded portfolio.

A tangled-up, mishmash of storage, server and virtualization offerings with a slew of interoperability and performance issues. That is the technology scenario a large bank in New York was struggling with before Dell Technologies and AHEAD swooped in to save the day.

“It was a complete hodgepodge where it was very expensive to run and nothing seemed to work,” said Stephen Ayoub, president of AHEAD, a $1.3 billion Chicago-based Dell Technologies Titanium partner, regarding the bank’s IT infrastructure.

Together with Dell Technologies, AHEAD replaced all of those competitive products by leveraging mostly VxRail—Dell Technologies’ market-leading hyperconverged infrastructure—as well as VMware’s software stack to win a $150 million contract. AHEAD was able to save the bank millions each year by cutting its annual IT costs by 15 percent while at the same time increasing reliability and massively reducing deployment time and complexity.

“Our customer conversations are not about going down to the managers or directors to ask them to pick out point products, but to come up with a strategy around IT. Not a strategy around storage, a strategy around networks, a strategy around servers, a strategy around applications,” said Ayoub. “Three years ago, customers wanted best-of-breed products. Today, they’re asking less about best-of-breed and more about interoperability as IT is getting more complex. So if I want to offer them end-to-end solutions, Dell is really my option because they’re the only one to truly deliver that. They’re in a position to have relationships across the entire organization.”

Partners like AHEAD said Dell Technologies’ next- generation Power-branded portfolio—including its brand-new midrange storage line—combined with its tightly integrated VMware software stack—are allowing them to take out server, storage and networking competitors at a stepped-up pace. On the strength of its growing portfolio, they said the $92 billion Round Rock, Texas-based behemoth is poised to make steep gains in infrastructure market share.

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Dell Technologies Chairman and CEO Michael Dell said his company has never been better positioned to win share from competitors. “Our portfolio has never been stronger,” said Dell in an interview with CRN in mid-March, as the full severity of the novel coronavirus worldwide pandemic was still unfolding. “The entire portfolio is being refreshed under the Power brands. Markets are consolidating. We have very ambitious goals.”

In these extraordinary times, the company’s current focus is on helping channel partners and customers build the solutions they need to get through the coronavirus crisis. “Customers and partners need us more than ever,” Dell said.

But when the world starts to get back to business as usual, the company will be primed to build on the strength of those products to continue its quest for market-share dominance.

Dell Technologies channel chief Joyce Mullen, president of global channel, embedded and edge solutions, said customers are reliant on the company’s channel partners to help them stay operational as a significant portion of the world’s population finds itself under lockdown.

“There are a whole bunch of new skills, capabilities and infrastructure design elements that many customers hadn’t really considered or hadn’t prioritized before this. Our partners are filling in those gaps,” Mullen said.

Dell Technologies’ end-to-end product lines are enabling customers across the globe to create remote workforces, secure critical data and scale without disruption, she said. “We have best-of-breed products for anything the customer needs—laptops to hyperconverged infrastructure,” she said. “So we have great solutions with our Power brands to back up all of their critical data, applications and the need for infrastructure that is being generated all over the world.”

Dell Technologies’ next-generation Power product lines in storage, servers, data protection and networking include tailor-made solutions for the SMB market all the way up to the largest enterprises in the world.

Its new PowerEdge servers aim to become the bedrock of modern data centers, while its PowerMax storage line is chock-full of automation.

Dell Technologies also is betting that its PowerSwitch networking gear will drive new wins in 5G and at the edge. And, as protecting data becomes paramount for customers, its new PowerProtect data protection appliances are able to manage, recover and secure data at scale.

The new streamlined portfolio spanning from the edge to the core to the cloud is now locked and loaded, executives said. And, according to Michael Dell, now is the time for solution providers to sell across the full Dell Technologies portfolio.

“Partners who sell storage, server and client generate approximately 13 times the revenue per partner as compared to partners who are selling just two LOBs [lines of business], and approximately 40 times the revenue per partner who just sells one line of business,” Dell said. “The partners who are selling VMware are doing even better. Dell Financial Services is continuing to grow rapidly as partners are utilizing that. More and more partners are selling more multi-lines of business. We’re feeling good.”

Alongside its revamped Power portfolio, Dell Technologies has spent a colossal $5.5 billion on mergers and acquisitions over the past several years, buying some of the world’s top IT talent and technologies, including Kubernetes star Heptio at the end of 2018 and, through VMware, endpoint security innovator Carbon Black in 2019.

“If you look at the last couple of years, we’ve done $5.5 billion in M&A,” said Dell. “A lot of that is in areas like networking and security such as Carbon Black, bringing Pivotal into VMware, and the big VMware Tanzu [Kubernetes portfolio] that we launched. The combined power of those solutions is resonating.”

With its next-generation portfolio and experienced sales force ready to fire on all cylinders, Dell Technologies needed to find a way to rev up the delivery and go-to-market process in order to successfully execute on the company’s bullish market-share goals. To that end, Dell Technologies unified its enterprise and commercial sales organizations for the first time under the same roof and put EMC veteran Bill Scannell in place to oversee it.

‘The Sky Is The Limit’

Scannell said his aim is to lead a market revolution that gives Dell Technologies more than half of the worldwide server, storage and hyperconverged infrastructure market.

“The sky is the limit,” said Scannell, who officially became president of global sales and customer operations in February and spoke with CRN soon afterward, ahead of the coronavirus being declared a pandemic.

Scannell aims eventually to win upward of 50 percent of the worldwide infrastructure market, a campaign that will be led by tens of thousands of global channel partners. Those partners delivered $52 billion in orders over the past 12 months, backed by Dell Technologies’ 30,000-strong go-to-market organization.

“The opportunity for us to expand our storage market share [percentage] from the low 30s to the low 40s to the low 50s is there. Likewise, in hyperconverged—we were a little late to the market—but we quickly became the market leader there. Whether it’s VxRail or VxFlex, we have the best offering. … We have less than 30 percent server share. I believe as a market leader, we should have over 50 percent market share.”

Dell Technologies partners see Scannell providing the sales leadership to deliver big market-share gains. They credit the 34-year Dell EMC veteran with playing an instrumental role in EMC’s successful push into the channel in the 1990s and storage dominance in the 2000s. They say there is simply no one better to take over the reins of Dell Technologies’ 2,500 enterprise accounts and more than 500,000 commercial customers as its new sales leader.

Jim Kavanaugh, CEO of $12 billion solution provider powerhouse World Wide Technology, has known Scannell for years and believes him to be the spark that can ignite Dell Technologies’ channel sales to new heights.

“EMC was at one point a very direct organization. Bill saw where the market was going and the need to build out the channel partnership—he led a big part of that. He did a great job building the channel at EMC,” said Kavanaugh, whose St. Louis-based company works with 70 percent of the Fortune 100. “Bill is somebody who is very direct, which I like, so you know where he stands. The people that work for him try to take that same approach so we don’t have to spend a lot of time guessing what we’re going to do—we can cut to the chase and put the tough questions out there to make sure we can grow the partnership. Bill should put Dell in a better position across the board from an alignment go-to-market perspective.”

Kavanaugh said WWT’s Dell Technologies sales jumped more than 17 percent in 2019 compared with 2018, with continued high-growth expectations for this year.

Channel partners said Scannell’s career has led him to this moment, ready to step in when Dell Technologies needs a next-level sales leader who knows the industry inside out.

“Bill has a history of driving sales teams to one common goal—that’s what Dell needs right now,” said AHEAD’s Ayoub. “They don’t need multiple segments, as they were set up in the past. I think you saw a disconnect when you had leaders of the commercial team and then leaders of the enterprise team because the enterprise team was executing as one team and one strategy, and the commercial team was still very segmented with the server team running one play, the storage team running another play and the backup team on their own. Billy does a great job in taking a complicated message, simplifying it and executing on a single go-to-market strategy. He’s the right leader at the right time. He’s going to rally everybody to march toward one common goal.”

That goal is to rapidly increase market share in servers, storage, networking, hyperconverged and the client space. “I’m focused on, ‘How do I get storage to over 50 percent share? How do I get server to over 50 percent share? How do we help consolidate the client business?’” said Scannell. “Between our own networking top-of-rack switches to what we’re doing with VMware with SD-WAN, we have a great opportunity to go after that networking market, which is an adjacent market and a very profitable market. We have an opportunity to become a market leader in networking. So the opportunity for Dell Technologies is great across the entire portfolio.”

When questioned about his strategy of indirect versus direct selling in his new unified commercial and enterprise sales organization, Scannell quickly fired back, “I wouldn’t say direct versus indirect, I’d say direct and indirect. It’s not an either/or—it’s a both. I’m no stranger to the partner community.”

After the blockbuster merger between EMC and Dell in 2016, Scannell became president of enterprise sales and customer operations. Over the past three years, he helped Dell Technologies grow from $77 billion in revenue to $92 billion, with more than half of the business now going through the channel.

Competition And Market Differentiation

Looking at the market-share numbers for 2019, Dell Technologies won approximately 30 percent share of the worldwide external enterprise storage market by generating more than $8.5 billion in sales, according to market research firm IDC. Hewlett Packard Enterprise captured 10.7 percent global share with just over $3 billion in sales, while NetApp won 10.3 percent share with $2.9 billion in storage revenue.

In the enterprise server market, Dell Technologies captured 17.8 percent of the global market share with $15.6 billion in sales and shipped more servers than any other company last year by selling approximately 2,050,000 units, according to IDC. HPE, combined with its China-based joint venture New H3C Group, won 17.3 percent of the worldwide server market in 2019 with $15.1 billion in sales by selling 1,820,000 server units. There were no other server vendors that achieved double-digit market share last year.

In terms of competition with its main infrastructure rival HPE, Scannell said Dell Technologies has several advantages.

“HPE has done a lot of things well. They’ve done a lot of things I wouldn’t have done. But when I think of the hand we have to play, I think of our supply chain—we have the best supply chain in the world. We buy more than anyone else in the world. So at a time when [Hewlett-Packard] was splitting into HP Inc. and HPE, and actually hurting their buying power, we were bringing together Dell, VMware and EMC and actually increasing our buying power,” said Scannell. “So do I think we’ll continue to take share in the server market? Darn right we will. Will we do it in the storage space? Darn right we will. Will we do it in the client space? Darn right we will. We’ve got the biggest organization supported by the biggest service organization, supported by the biggest channel organization in the world.”

One huge market differentiator for Dell Technologies is the company’s ability to create holistic architectures with products that seamlessly interoperate with each other from the edge to core to cloud. The family of brands under the Dell Technologies umbrella includes one of the largest PC vendors in the world in Dell; Dell EMC’s market-leading server, storage, hyperconverged and software portfolio; Virtustream for cloud computing management; security threat intelligence standout Secureworks; and virtualization and hybrid cloud superstar VMware, lauded by many as the company’s crown jewel.

Instead of having a complex IT environment made up of a slew of different vendors’ hardware and software, Dell Technologies’ ever-expanding portfolio enables the creation of differentiated all-in-one platforms from a single source. These prepackaged and integrated platforms tightly wrap a mix of Dell Technologies data protection, networking, servers, security, software, storage and virtualization offerings together for a powerful punch that is winning over customers.

One of its shining stars is the world’s most popular hyperconverged infrastructure (HCI) platform: VxRail. Dell Technologies’ flagship HCI product has been growing annually at a triple-digit clip thanks to joint development from Dell EMC and VMware engineers who are working hand-in-hand.

Dell Technologies currently owns approximately one-third of the worldwide hyperconverged infrastructure market. In 2019, Dell Technologies generated more than $2.5 billion in HCI sales to dominate the roughly $8 billion global market, according to IDC. The only competitor even close to Dell Technologies is Nutanix, which generated just over $1 billion in hyperconverged revenue last year to win approximately 14 percent of the total market. Other competitors, including Cisco, Lenovo and HPE, were each only able to capture between 4 percent and 6 percent of the global market share in 2019.

With the deep level of co-engineering between Dell EMC and VMware, channel partners said VxRail is a clear cut above the rest.

Scott Winslow, founder and president of Waltham, Mass.-based Winslow Technology Group, saw a 77 percent spike in VxRail sales in 2019 thanks to the platform being VMware-centric.

“When you have 80 percent of the customers running VMware, that means VxRail can fit easily into 80 percent of the environments. The integration between VMware and VxRail is a strong selling point to the customer who’s likely going to be able support a VMware environment,” said Winslow, whose company is a 2019 CRN Triple Crown award winner, being named to the Solution Provider 500, Tech Elite 250 and Fast Growth 150 lists. “VxRail is making it simple for the customer. You have one-click upgrades so instead of having to upgrade your VMware, upgrade your networking, server and storage all separately, you’re doing all of that through one GUI, and it’s very easy from an operational standpoint. There are other solutions that support multiple hypervisors, but in many of the cases, VxRail is the solution for customers running VMware.”

Market-Disrupting Platforms

With the full backing of VMware, Dell Technologies is doubling down on end-to-end platforms similar to VxRail that leverage the company’s next-generation Power portfolio.

Last year, Dell Technologies launched PowerOne, an autonomous infrastructure that combines PowerEdge modular servers, PowerSwitch open networking, PowerMax storage and PowerProtect data protection along with VMware vSphere virtualization, which is all deployed, managed and maintained under a single pane of glass. In addition, PowerOne includes a built-in intelligent automation engine, which automates thousands of tasks with the ability to have vSphere clusters available for workloads in just a few clicks.

Dell Technologies has the unique ability to build these types of market-disrupting platforms under one roof. However, that wasn’t the case just a few short years ago.

For example, Vblock was one of the first popular converged infrastructure platforms created years ago that combined Dell, VMware and Cisco hardware and software together in a prepackaged offering. Partners said Dell Technologies has the ability to take those end-to-end concepts to the next level, which is a key reason why they believe Dell Technologies can increase its market share significantly over the next several years.

“So instead of needing to buy Cisco compute, you have an option with PowerOne for Dell compute, Dell networking and Dell storage. It’s like a competitor to the Vblock solutions which was somewhat Cisco-centric—now it can be Dell-centric,” said Winslow. “With PowerOne and its autonomous operations, they’ve really done a lot with simplifying operations of the infrastructure and making it easier to use. So you have all this built on Dell hardware and software, VMware as a hypervisor and then autonomous operations built in. Talk about a way to drive up your compute sales and market share, this is one way to do it.”

In addition, Dell Technologies is betting that smaller, niche players will eventually face trouble as the market consolidates and customers seek less complexity and lower IT costs. Some channel partners feel the same way. “Some of those players are not as diversified as Dell and can only focus on one area,” said Winslow. “So some of these companies are going to struggle.”

The Impact Of Acquisitions

Since 2019, Dell Technologies has purchased a slew of vendors, including application and artificial intelligence specialists BitFusion and Uhana; software-defined networking and management standouts Veriflow, Avi Networks and Nyansa; app deployment specialist Bitnami; and application security startup Intrinsic. One of its biggest purchases was DevOps superstar Pivotal Software, a $2.7 billion deal orchestrated through VMware that closed in January. Pivotal, which was already part of Dell Technologies’ family of brands, is the owner of the popular Kubernetes-based container platform Pivotal Container Service (PKS) which is being natively integrated into various VMware products.

Dell Technologies’ most bullish acquisition came in October with VMware’s $2.1 billion purchase of endpoint security leader Carbon Black. VMware has already integrated Carbon Black’s cloud-native endpoint security software into its flagship hybrid cloud platform VMware Cloud Foundation and software-defined networking and security product NSX.

Robert Keblusek, chief technology officer for fast-growing Downers Grove, Ill.-based Sentinel Technologies, said it was a bold move for Dell Technologies to buy and quickly inject Carbon Black’s capabilities into various platforms to bolster its security posture.

“Even though Dell has security products that they’ve made from acquisitions, I’m not so sure that they’ve been really stood up as a security leader. But when I start to think of leaders like Cisco, Palo Alto Networks—Dell is definitely getting all those pieces and parts together to attack the security market,” said Keblusek. “Carbon Black was an excellent acquisition. I also feel NSX adds to that overall security story when you start to look at data center, cloud, and then how they’re enhancing security with [VMware] SD-WAN by VeloCloud—those are all really strong plays for them.”

Dell Technologies is aiming to reduce the number of security products organizations need to buy in order to fully secure their business. Enterprises can have hundreds of different security point products from dozens of different vendors in their environment, making interoperability cumbersome and the price tag high. By building security features like Carbon Black directly into its broad infrastructure and software portfolio, Dell Technologies said it will further separate itself from the pack as it looks to change the security market landscape.

Scannell refers to the company’s security business as its “best-kept secret.”

“When I meet with customers to talk about our capabilities in security, they say, ‘Jeez, I didn’t know Dell did that.’ We talk about how we can help them with a multi-cloud strategy,” said Scannell. “The power of Dell Technologies, as we’ve come together, our capabilities are incredible. So whether it’s digital transformation, IT, security or workforce transformation, we have really good solutions in all those areas and a better hand to play than any one of our competitors.”

‘Unbeatable With Our Partners’

Dell Technologies’ channel community is paramount to the company’s success, accounting for more than 50 percent of the company’s total revenue. To push channel partners to sell end-to-end solutions that span multiple lines of business, the company launched the Dell Technologies Partner Program. The program, which was rolled out in April 2019, makes it easier and more profitable for channel partners to sell across the entire Dell Technologies portfolio.

The program also makes it seamless to buy, procure and sell solutions with all products purchased through the program—regardless of brand—counting toward tier status and tier revenue requirements. There is also certification simplification and joint program tiering to ensure partner investments and time in the sales field are maximized. Partners in the program also are granted more incentives, rebates and margins when they sell multiple lines of businesses.

“Many of our best partners are selling all of our lines of business,” said Scannell. “If you’re selling one of our lines— for example, you’re selling our server but not our storage or not VMware or the client—you make good revenue and profits. … [But] if I’m a channel partner and I want to grow my business by 100 percent, I’m going to sell more of the Dell Technologies portfolio. With that also comes more margin, more rebates and all the things partners like about the Dell Technologies program.”

Scannell isn’t the only longtime Dell Technologies veteran leading the charge toward market-share dominance. Jeff Clarke, chief operating officer and vice chairman for Dell Technologies, has been with the company since 1987, while Mullen’s tenure extends more than two decades.

Michael Dell said with the combination of an experienced leadership team, next-generation Power portfolio, a cross-selling-focused partner program and one of the largest sales and engineering forces in the world, Dell Technologies has significant market-share opportunity in front of it.

“Billy has laid out an aggressive plan for the future. There’s a ton of opportunity ahead,” said Dell. “The product line has never been stronger.”

Partners have tremendous faith in Dell Technologies’ leadership team. WWT’s Kavanaugh said to “never underestimate Michael Dell,” who has a strong work ethic and drive to win.

“I remember talking to Michael at one point in time when he was taking a little time off vacationing. He spent two weeks on the beach, and he mentioned about at that point he was ready to pull his hair out because he was just getting bored. I would be the same way,” said Kavanaugh, who co-founded WWT in 1990. “In these types of challenging times and challenging business opportunities, the goal is to grow Dell Technologies. I think it is something that energizes him. … He’s always been creative, innovative and open-minded to where the market is going and what the customer wants.”

Kavanaugh said Michael Dell and Scannell are the one-two punch needed to drive Power portfolio sales gains. Scannell, likewise, has faith in Dell Technologies’ partner community.

“[From] the day I started with the company 34 years ago, I’ve leveraged our partner community, and it served me well. I don’t expect to go backwards in that area,” Scannell said. “Our partners are looking for the safe bet, and our customers are looking for the safe bet. Who’s going to be here for the long term? Who’s got the winning hand? Who’s got the better strategy? We do. We are going to be unbeatable with our partners. I really believe it.”