In the APJ market, Dell Technologies has prioritised four key things. First, PowerStore, the platform which addresses a lot of Cloud challenges and it is targeted towards the mid-range market. Another priority of the company is remote and the hybrid workforce. It will be a huge opportunity for partners and they will play a crucial role to support the customers. Third, Power for Partners. Power is a campaign on which Dell is working with its partners. The company has a set of programs that allow Partners to go out and acquire and to cross-sell to their respective customers. So it is an exciting program where Dell is working for partners, called Power. Finally, the last priority in Project APEX, it is a new as-a-service initiative and the company is quite excited about it.
In a chat with VARINDIA, Tian Beng Ng, Senior Vice President & General Manager - Channels, APJ, Dell Technologies and Anil Sethi, Vice President & General Manager, Channels, Dell Technologies, India discussed at length about the financial year, trends, channel vision, Project APEX and much more.
Tian Beng Ng, Senior Vice President & General Manager - Channels, APJ, Dell Technologies
2020: A strong growth year
2020 has been a very good year for the tech industry. I am happy to say that we had very strong FY-21 results at Dell. The year’s revenue was actually $94.2 billion, which is up by 2% YoY. The Q4 revenue was $26.1 billion, up by 9% YoY. We really had record performance in many areas. Operating income was a new record effort by $1 billion. Cash flow was very strong at $11.4 billion for the full year. We delivered $52 billion through our partners globally in orders. So, you can imagine just by the business by itself, $52 billion is very significant.
Key Trends & Channel Vision
Especially in Channel, we continue to specialise around specific industries. The pandemic actually has brought a lot of challenges and opportunities. We have seen the growth of data and it is continuous. In fact by 2025 we estimate there will be about 163 Zettabytes of data. We at Dell have identified six key technologies that will be key to the future and they are Cloud, Edge, AI, Machine Learning, 5G, Data Management and Security. So these six technologies are really important for digital transformation.
If you look at the partner landscape and the trends, I think the first big one we are observing is multi-cloud. In fact we estimate that by 2023, 70% of all enterprises will actually be deploying multi-cloud strategies. Multi-cloud means that it will be both on-premise and across different public clouds. With multi-cloud, obviously the complexity will increase. With this the channel partners will have a huge opportunity to play here to support customers as they adopt a multi-cloud strategy. So that will be the first key trend.
Secondly, Edge computing is very important, because now it is important to bring computing closer to edge to process the data faster. Now, there is not enough time to wait to move the data all the way from the edge back to the data centre. Then with 5G the bandwidth will increase, so you will see a lot of trends will move to edge. We believe that nearly 80-100% of edge computing will happen through our channel partners, because to do edge computing you really need very specific types of solutions. I think our partners are in the best position to actually do that. Over the next 3-4 years we believe that edge computing has the potential to have a market growth of $120 billion.
Third is as-a-service and the consumption model. It is really a big trend in the happening, and one of the big reasons is the big increase in demand for business specific outcomes. I think because the partners are able to understand their customers’ business better, are able to actually do that. As-a service or consumption model is not new to Dell. In fact, we have over 2,000 customers already who are currently on the as-a-service or the consumption model. In India, we have recently launched our Flex on Demand. So we do have a consumption offering in the Indian market and we work through our partners. The other big interesting thing is project APEX. We announced it last year. Project APEX is our focus and that will be driving a lot of our offerings to as-a-service.
Last is workforce transformation. During the pandemic last year, I think everyone got to know that PC is the first choice of people now. The PC demand is just really surging and I think we are seeing that trend to continue. In fact, many folks are calling it the Renaissance of the PC.
These are our channel vision of the future. At Dell we are focused on it with our channel partners along with our three tenets of our channel vision. No. 1 is Trust - we will ensure that we are building trust with our partners. In fact, when we designed our new partner program, a lot of it was based on consultation with our partners, getting feedback from them. So, the program was on trust and we definitely want to continue to deepen that trust. Next is Growth. When we think about growth, we want to think about acquisition, acquiring new customers, cross-selling, data centre opportunities. We do have a lot of programs in place to encourage our partners. Finally, the next one is Change - it is something that is a way more longer term. But we want to ensure that we want to work with our partners to really work on things that are more transformational. For example Digital transformation, project APEX, these are some examples of change.
PowerStore
We are excited about PowerStore because the mid-range market is really the largest opportunity. In fact, in APJ, mid-range market accounts for 62% of the storage market and it is about $2.2 billion, just this year. PowerStore, the platform, addresses a lot of the cloud challenges and we are really excited because it is a revolutionary architecture. It really combines the best of the hardware with Apps-on capability. So, with this platform you can actually run your apps directly on your clients, which is really unique. There are actually three big advantages of PowerStore, one is data centric. So it can really pick on any workload. It is up to seven times faster, in fact it is three times more responsive than our previous mid-range solution. Secondly, it is actually more intelligent and one can program it and easily integrate with the VMware kubernetes. It is very flexible because of the Apps-on feature. So with PowerStore, customers can really deploy it to meet their cloud strategy and their business needs very well. We believe that the Dell PowerStore solution will really revolutionise the cloud era and really elevate cloud strategies for companies. Partners selling PowerStore, they can earn now up to 20% of upfront margins.
Anil Sethi, Vice President & General Manager, Channels, Dell Technologies, India
Dell bolsters its position in India market
2020 was a historic year for us in India. We have not done as well in many past years. Every single LOB (Line of business) showed a huge growth year on year on a quarter basis, and that was phenomenal by any standard. This led to the big winning in the market as a company, as a subsidiary. Even as Dell India we did extremely well and it was a historic quarter. That led us to gain the No. 1 positions in multiple things. We have never seen No. 1 in our entire client offering which could be notebooks or workstations or other commercial client solutions. We were No. 1 in servers, and some of the storage and Hyper Convergent Infrastructure which is HCI. These are the IDC numbers and we generally have started calling it Triple 1. So, Dell is at No. 1 position in client, servers and storage segment. This has been a historic year in many ways where we had phenomenal year-on-year growths coming up towards the end of the year and placing us into the leadership position in every single category that we sell.
Partner Opportunity
We are highly investing into the channels and that shows how serious we are into this business. So we have our partner account managers or our inside account managers managing them and inside sales people managing them. So this is the downstream in the pyramid, so there are top, middle, centre and the downstream pyramid.
The whole channel strategy which any company would have is all about coverage. So optimizing the cost and having a channel is a leverage model, opportunity identification is to be done by channel that is the way we have it in the business. So once the partners identify an opportunity we help them to close it. We have great processes, we call it deal registration so this is on a first come first serve basis, whoever has registered a deal we only work with him. So that it gives them a confidence and the trust to say that if you are our first identifier, then they have to login into an App and there is an auto remover, auto approval system and no manual intervention. It helps in two things, one, for them to save the investment in the time that they have done, in a way the time investment protection that comes in for that account and the opportunity in that account. Then once that comes in, it comes into our pipelines and we have SFDC, our data and our teams are anyway helping them in pricing and our pre-sales people help them in closing the opportunity.
Growth Verticals
There are three important verticals which grew at a fair pace, first is the BFSI and second one is the Government, it has continued to show growth and the third is ITES. But you will be surprised to know that in the second half the growth was across. It was just coming across because the IT infrastructure became a key to success and everything changing into the digital world we have all gone into and so it was phenomenal. When I say BSFI this includes not only just banking but all that new, UPI platforms and every single virtual wallet company; so this continuity shows a big trend on the growth. Lastly, we have seen how the new data center requirements are coming up and our data warehousing solutions were phenomenal and we could see on how we can try data center solutions. We were specifically focused on it.
We could witness a very good trend across the partners which was there, let me give you two data points so we had 70% of our partners in the metal categories showed 25% year on year growth and this whole thing has changed quite a bit in the second half. That is where the market has opened up and I think all budgets got into the place and got approved by the companies for IT first and this was visible. Second one is, every company has some of their top customers and they want re-fresh of IT. It was on their Edge site or on the server site and they were either refreshing it because earlier IT was not making sense to them, either there was a tech refresh in many other forms where the server refreshing was happening, they were buying new IT equipment and their Edge site. So this did see that great trend and growth.
