Dell Channel Blog

You remember Moore’s Law – data density doubles every 18 months. Clearly a Moore’s Law-like factor isn’t happening to the channel business model. The other day we had a meeting with one of the major industry analyst firms and we saw a statistic that was a shock on two levels: First, the numbers themselves were hard to believe, and second, the fact that they have not changed for eight years. They studied VARs who participate in channel programs from all vendors, and asked them about their operating expenses. Here are the results:

· About 2/3 of their revenue went back to simply running the business

· About 15% of revenue went to growing the business. I’m assuming here that ‘growing’ means attracting new customers and retaining the old ones

· So less than 15% went to ‘transforming’ the business – developing new services or practices, reaching new markets, etc.

Since the pie is finite, about the only way a channel partner to become more profitable is to get new customers or reduce the amount of money spent running the business -- or both. If you wonder why Dell’s PartnerDirect channel program is so different, it is because we focus on the ‘running’ and ‘growing’ components of the equation. A simpler program and a supply chain built around efficiency can lower the cost of doing business with Dell. Simplified technology – part of the Simplify IT initiative – provides products and solutions that are easier to get, run and grow. So if you can lower your costs and get products and solutions to help you grow faster, why wouldn’t you be a channel partner with Dell?