 Okay, we're back. This is Dave Vellante of Wikibon.org, and this is SiliconANGLE.tv's continuous coverage of Dell Storage Forum 2012. This is theCUBE, where we bring you the smartest people we can find, we extract knowledge, we package it, we extract the signal from the noise and bring it to you, our audience, and we're here to talk about the channel. Now, of course, when you think about Dell, historically, you think about the direct channel. Well, Dell has transformed its channel organization, and we have two individuals today to talk about that. Bob Skelly is to my right, he's the global director of the Certified Partner Program at Dell for Channels, and Greg Davis, we call him the channel chief. He's the VP and General Manager of the Global Commercial Channels. Gentlemen, welcome. Thanks, Dave. So, you heard what I said about Dell and the transformation. This morning, you guys gave the big keynote, GMPACT, strong channel message. This transformation. Tell us about it. Well, very happy to be here at Storage Forum. Very happy to see a standing room only at the meeting this morning. So, we made a large investment in our channel business over the last five years. We launched our partner direct program five years ago, December, 2007. We've invested throughout that period in a consistent manner, and we've seen substantial growth in our partner revenues. I mentioned the keynote this morning, a third of our commercial revenue now comes from partners, right? So, the partners that are in the room there and other partners around the world comprise a third of Dell's business volume. So, big, big shift in our routes to market and our go-to-market strategy, and our partners are embracing the programs and rewarding us with business. Which is an enormous number. The top line of Dell is obviously huge. Where do you see that going? I mean, is that sort of where you want it to be, or do you see that growing over time? Well, we've really never measured it in terms of the percentage of our business, but rather we believe we've got all the fundamental elements, the structure, and the products to grow twice as fast as the market. So, our focus, Bob and myself, is how do we go and find new partners, get them trained and certified, and begin to ramp them so that we can keep the growth going. Every country around the world where we have our program in place, we're growing at least two times faster than the market, and we want to continue that. So, what is the certification, you know, entail, Bob? Yeah, so, certification, what we did is, we structured a program that really looked at the partner business models, thought about how they go to market, and then structured a certification program that really coupled Dell's solutions with the different go-to-market strategies that we're seeing from our partners. And so, we really built it around choice and flexibility and tried to cover all the different solutions, storage, server, systems management, networking and security, and then most recently, cloud services and solutions. And what we do is we bring a whole host of training curriculum to our partners, a lot of it online, but a lot of it also instructor-led where they can get right in front of a course instructor in a live venue. And we had over 135,000 courses that were completed last year alone. And that was up from about 75,000 a year before. So growing very fast and huge adoption. So that's key. I mean, obviously that's a great value add, but at the end of the day, the channel, they're about profit, right? They care about making money, right? And so, what's, and everybody's going after the channel. I mean, all your big competitors, the big channel land grab going on. So Greg, what's different about Dell for the channel? Well, Dave, you mentioned profit and to kind of dovetail on what Bob said, you know, customers will pay for expertise. So you want to be an expert, you know, customers will pay for your level of expertise. And our training is really designed around enabling our partners to be experts. And we make that investment, it's free training from Dell, but the partners that invest there become trained experts and they're enabled to do the right job for customers. And that creates profitability. The other areas we're really focused on is ensuring that our programs, right, are all designed around data center solutions, right? So another area of high profit for our channel partners is data center solutions, whether it's servers, networking, you know, we're here at the storage forum, but you've got security that's a wrapper around the entire thing. And then we're also, you know, very excited about the recent wise announcement and how we can bring virtual client as a product portfolio to our partners as another profit enhancer. You tie all that together to, with our simple message of, we want to be the easiest company to work with, that's been the mantra of our channel program. So when you compare us to everyone else, we think we can win if we can continue to be focused on ease of use for our partners. So there was a big emphasis this morning on end to end. And of course we're at the storage event. So you have a lot of storage resellers out there. How's that message resonating? You know, and what does it entail? Because there's more training involved if I'm going to go beyond, you know, outside of my comfort zone of storage. So how's that all shaping up? Yeah, it's resonating really well. So, you know, we have in North America alone, we have over 500 partners who have went and gotten certified on multiple competencies. So they've gone out and been trained on storage and server or storage and networking or server and networking and security, some combination. And so over 500 partners have embraced multiple disciplines. We've got our premier partners which requires two disciplines and other commitments around solutions training. There's over 200 partners now who have made the commitment in taking all that extra training to become premier with us. And so we're seeing great adoption in getting cross-trained across many different solutions and going to market with Dell around an end to end solution to their customers. So Bob, last year in the Cube, you were on with Callie Lewis and John McCarthy. You might recall, down in Orlando, and you gave a little factoid and I want to just get an update. So you said at that time, Dell had 2,500 certified preferred partners globally, 10% qualified at the highest level, which is premier. That's right. And you said that in fact Dell's channel business, this is last year, a year ago, would rank as number 350 in the Fortune 500 if it were a standalone company. So talk about sort of how that's progressed and where you're at today. Yeah, so in terms of the number of certified partners, we continue to add new partners to our program globally and then through acquisitions, of course, we've also brought other new partners in and we're closer to 3,000 certified partners today and that includes some partners that may have moved on to registered level within our program. So some of those are moving down into registered and then other partners are replacing it. So we're adding about 500 new certified partners every year based on the training commitments that they're making. I don't know where, I wish I could give you the 350 out of Fortune 500. That was something we talked about last year. I don't know where, it's bigger because we're bigger and we've grown a lot and it's even more revenue coming through the channel than it was last year. But I don't know where it ranks today. So guys, if I could just add to that, right? I don't know how the exact stat, but we're excited about the growth. I touched on we're growing faster than the market, right? And so while there's ups and downs in the economy or the markets, we're feel very comfortable about the strategy that we've got in place for the partners and our growth alone is bigger than most other companies' channel businesses. So it's exciting to be a part of Dell for our partners. So when you say you're growing faster than the market, specifically you're talking about the Dell channel, the Dell storage channel, both, can you just add to that? Yeah, so it's great clarification, Dave. When I mentioned that was we put the channel program together five years ago. We talked about our goals and what we thought we could accomplish. And to a team member, we said, look, if we do this right, we put the structure in place. We, as a channel organization, should be able to grow faster than the market. As IDC or Gartner would define the IT spend in a given market, whether it's U.S. or Germany or the U.K., right? And so those have been our targets and goals and we continue to drive past those goals, every year and every market that we're working in. So you guys have been in the channel business for a while and you've seen a number of companies, well, I call the head fake, you know? Oh, we love the channel. We love the channel. And all of a sudden, boom, the rug gets pulled out from underneath. Has that changed? Is that sort of ancient history because all the major players, I call it a land grab before going after it, but there's still some skeptics out there when I talk to people on the channel. What do you tell the skeptics, Greg, about your business? Well, in terms of, is Dale serious about it, right? Then, you know, I tell our partners, I tell any prospective partners, you just have to look at our track record. So, you know, we made a commitment to the channel business. We've invested every single year. We've never pulled back away, right? And so, a lot of partners are taking advantage of it. And if you're not out there taking advantage of it, your competition is. And so, we're less focused on acquiring new partners now and much more focused on, you know, getting deeper relationships with the partners that we have. And we think that's the step for the next several years in terms of growth. Yeah, and you're going to extract more business out of your existing customers in general than you do out of new customers. Now, of course, as you got into the channel business, you had to start somewhere, right? Well, we had to build it up from the beginning, but now we've got a strong base of partners. As Bob mentioned, a strong base of Premier and preferred partners. And as I mentioned in the keynote, we want to train deeper. So, you know, our partners have 5% of their Salesforce trained on Dell. We want 50% of them trained on Dell. And we think that's the level of commitment we're looking for from our partners and we think it leads to return profits for our partners. Bob, how does the training differ from, go ahead, you get a point. Well, I was just going to say, I mean, Greg made a great point that we're less worried about continuing to add new partners to our certified program and more concerned about helping them get deeper and wider across our technology than getting more people trained. And what we're seeing, and Greg alluded to this in his keynote this morning, but what we're seeing is if you look at partners that are making the biggest investment in training with Dell, they're growing at a substantially faster clip than partners who are lower on that. And so 70, if you take the top 25, they're growing at 71% year on year based on training investments. So, it's a big number and we see a return. That's faster than the market. Slightly. That's faster than any market. So, Bob, how does the training differ from what a Dell employee would go through? In some case, it's very similar. What we do is we take a lot of the training that is built for Dell employees and we add some channel messaging in there for it to make it real for them. So, we try and take the same product and solution content but then bring channel messaging that makes it relevant for the channel partner community. The other thing we do is we really invest quite a bit in online training. We want it to be very accessible so that they can do it self-paced. They can fit it in when they have free time. We know that it's a huge investment for a partner to take training and be away from their customers and so we want to make it as accessible and easy to get to as possible. So, I want to change subjects a little bit. Talk about cloud. Cloud opportunity or threat for the channel. So, it's two-edged sword, right? You've got this new cloud service provider becoming a channel. At the same time, you have new services that the channel can provide. So, the cloud is very disruptive to the channel. What are you guys seeing as sort of the best practice within the channel and in terms of guys who get it right? What are they doing and what are they doing right? Well, you know, for me, it's partners who have figured out to do both, right? It's not a, this isn't about trade-offs. This isn't about taking your old business model and throwing it out the window. It's about figuring out how you continue to evolve. And so, channel partners who have a hybrid model and are out there building a cloud strategy, moving into Cloud Builder so that they provide private or public cloud infrastructure for their customers. But at the same time, if you continue to offer infrastructure services, solutions consulting to their legacy customer base, they're doing both. So, it's not change your whole model and become just a cloud guy, but learn how to adapt and build cloud into your strategy. So, can your channel partners, how does it work with your services? So, obviously, some channel partners have their own services, some don't. Can they tap into your service portfolio? Can they brand it themselves? How's that whole issue work? Yeah, so again, it's really everything. So, I talk about choice and flexibility, not to hit a theme too hard, but everything we do is around choice. It's around choice and flexibility. So, if delivering those services themselves as a channel partner is the right way to go to market, we want to enable partners to go deliver those services. If leveraging existing Dell services that they want to resell at a profit is interesting to them, we want to make that available to them. We can envision a day when, as skills and capabilities continue to evolve in the channel, that maybe they actually are delivering Dell services on Dell paper on our behalf. So, there's a lot of ways we can go with the services model and bring profitability to the channel. And how about branding that? Can I, if I'm a channel partner, can I brand it with my own brand? Is it a Dell brand? Is it my choice? Yeah, it's your choice, really. It depends on the service you're engaging in. So, what we want to do is really facilitate the partner getting in there and delivering services to the customer. And oftentimes, that's on their own brand and on their own services capabilities. But we also want to make Dell services available to them for resell. Excellent. All right, Bob, well, thank you for chairing some of the training detail. And Greg, appreciate the keynote this morning and appreciate you guys coming on theCUBE. Keep it right there. We'll be back. 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