Why Dell's new channel-first storage strategy makes sense

Why Dell's new channel-first storage strategy makes sense

Why Dell's new channel-first storage strategy makes sense

Dell's recent decision to go channel-first with its storage sales will significantly increase the volume of business conducted via partners. It may have raised some eyebrows in the industry, but the announcement makes sense for many reasons.

Strategic advantages for Dell

A channel-focused approach will deliver Dell's storage business:

Expanded market reach: Enabling Dell to tap into a broader customer base via VARs, distributors and system integrators that have established relationships and expertise in specific markets.

Specialised expertise: Channel partners possess specialised knowledge about vertical industries, specific technologies and/or niche markets. They will enable Dell to provide customers with more tailored solutions and support, enhancing customer experience and satisfaction.

Cost efficiency: Direct sales models require substantial investments in marketing, sales teams and infrastructure to manage customer interactions and fulfilment. By using channel partners, Dell can distribute these costs among its partners, potentially saving costs and improving profitability.

Rapid scaling: An existing channel network could expedite Dell's ability to quickly scale its business and expand market presence without building everything from scratch.

Reduced channel conflict: By offering a channel-focused strategy, Dell can avoid competing directly with its own partners and maintain healthy relationships with them.

Risk sharing: Sharing the sales burden with channel partners can help Dell mitigate risks associated with market fluctuations, economic downturns or product-specific challenges. 

Customer choice: Some customers prefer purchasing through channel partners due to established relationships, value-added services or bundling options. Dell can now cater to these customer preferences and potentially capture a larger market share.

Cloud preferences: Customers are increasingly adopting a cloud-first storage strategy. Channel partners can help Dell meet this demand by lending their expertise in this space.

Dell's Partner First Strategy for Storage strategy will be good news for its European distribution partners, since CONTEXT's Distribution sales tracker in Europe shows storage declining -9.5% in Q2, after +17% growth in Q1. CONTEXT's forecasts for distribution predict further declines compared with a year ago in the final two quarters of the year. 

Howard Davies, CEO of CONTEXT, has posted about Dell's latest channel move, which you can read here.