Techaisle Blog

Dell has been aggressively peppering both the digital and print media with its enterprise storage campaign “running circles around everyone else”. It has reason to do so. Dell has come a long way from a dorm in Austin, TX to the corporate offices and consumer households globally. And Dell is doing all it can to take its channel partners, which are Dell’s extended sales and deployment team, along a fraught put potentially rewarding journey.

Dell’s channel momentum has not yet peaked. Q3 YoY channel order revenue grew by 21% as compared to 14% YoY reported in Q1. Distribution remains one of Dell’s fastest growing routes to market, having 19% Y/Y growth in Q3 (same as Q1) and through three quarters, accounting for roughly 40% of Dell’s overall channel mix. In early 2018 Dell had set a target of reaching US$50 billion in channel revenue and by end of 2018 it was at US$49B in orders (pending Q4 financial results). It has now set its sight at US$70B, timeframe as yet unknown.

Regardless of the success achieved, Dell continues to modify its partner program. Actually, it can be argued that continuous tinkering with the program has helped Dell to drive channel partner growth. While the core tenets of Simple, Profitable, Predictable remain, in February 2019 Dell has added three imperatives: 1/ making it easier for partners to do more business with Dell, 2/ fast-tracking partners’ ability to deliver transformational solutions, 3/ embracing and monetizing emerging technologies. Is Dell being very smart in using financial incentives’ levers to drive quarterly growth and revenue share and missing out on long-term transformation of its channel partners to efficiently participate in multi-cloud, connected business future? Is Dell focusing on the end zone without regard for down and distance? Let us analyze.

A Techaisle survey of nearly 900 midmarket firms on Digital Transformation trends in the US found that more than one-third of midmarket businesses – 34% - view digital transformation as a means of driving product innovation. Regardless of whether the ‘product’ that an organization produces is a physical good or a service, there is likely a link between DX and breakthrough design and delivery.

In both products and services, the key links between DX and product innovation are insight and agility. As the graphic below shows, these themes permeate the key business issues, innovation objectives and digital transformation drivers that shape the strategy of ‘holistic’ organizations – the most advanced DX users in the midmarket. These firms are using DX to respond to a set of imperatives that set them apart from their competitors.

Senior executives in midmarket organizations care about digital transformation – and as a result, channel members can leverage their understanding of key Digital Transformation objectives and roadmaps into long-term, sustainable relationships with senior decision makers.

A Techaisle survey of nearly 900 midmarket firms in the US found that 41% of midmarket firms believe digital technologies impact every aspect of the business and are a core part of organizational strategy and more than one-third of midmarket businesses – 34% - believe that digital transformation is a key to customer intimacy. Executives are surrounded by examples of organizations that are using data – drawn from integrated internal systems, or from social media, or from far-flung sensors, or from third party services, or from a mix of all of these sources – to improve the key operating parameters of their businesses. Midmarket firms anticipate 21% improvement in upsell/cross-sell, 20% improvement in brand image and 19% improvement in customer satisfaction as outcomes of a successful DX strategy.

DX-enabled organizations generate more revenue from cross-sell/upsell; they have greater customer loyalty; they are able to open new markets and introduce new products and services faster and with better payback periods. And they do this through customer intimacy – by better understanding what their clients want and need, and by being agile in responding to these wants and needs. Techaisle research finds, in fact, that performance metrics that are tied to customer intimacy – improved upsell/cross-sell of products, improved brand image, and better customer satisfaction and retention – are the areas expected to improve the most as a result of digital transformation in the organization.

The constraints
Building customer intimacy is a little bit like making Baked Alaska: the promise is delicious, but the method is mysterious. With Baked Alaska, it’s the notion that ice cream can emerge from an oven unmelted. With customer intimacy, it’s the mystery of how to successfully aggregate data and integrate it with customer-facing activities.

A Techaisle survey of nearly 900 midmarket firms in the US found that 42% believe that digital transformation is a key to employee empowerment. In an era where employees are expected to move fluidly across a wide range of tasks – and where staffers and contractors expect to be able to work at any time, from any location, with access to any data source they might require – employee empowerment is a key factor in driving corporate responsiveness, staff recruitment and retention and bottom-line success. No wonder improving workforce productivity is #1 in the list of midmarket business priorities.

Digital transformation offers a path to translating the promise of core technologies, such as mobility and cloud, into new empowerment and process options, via the creation of a connected workplace where applications and collaboration systems seamlessly connect to the anytime/anywhere/anyplace/any data demands of the modern workforce. And this digital transformation evolution leads in turn to realization of the other top issues shown above: reduced cost, increased profitability and growth, and better processes and customer outcomes.

The constraints
It is important that the channel step up to helping clients to build digital transformation strategies – because midmarket firms are struggling with a wide range of challenges that impede the evolution to an empowered workforce. From a workforce perspective, digital transformation demands change within both IT and the workforce as a whole. The key digital transformation challenges identified by midmarket firms – are lack of skills, a risk-averse culture and lack of adequate technology to support digitization initiatives.

The third of these issues, adequate technology, is often a digital transformation stumbling block for midmarket IT organizations. The digital transformation vision for employee empowerment includes self-service access to needed applications and data; the reality of many IT shops includes an inability to integrate data across different systems and to deliver it securely on an any place/any device/any application basis, and a mobility strategy that falls short of corporate requirements for security and data protection, auditability and disaster recovery.

The second issue, a risk-averse culture, extends beyond IT to executives who have not yet grasped the potential benefits associated with digital transformation – or, in the context of a fast-moving economy, the need for change. In some cases, this may simply reflect a desire to continue with ‘business as usual,’ while in others, it may stem from an inability to see how their firms can bridge the gap from their current reality to a brighter digital transformation future.

The top issue, lack of skills, is one that needs to be addressed by the channel. It will be years – possibly, decades – before digital transformation skills are so common that every midmarket firm has depth in both IT and in the workforce at large. Until that time, the channel needs to provide leadership to its midmarket clients: it needs to deliver the IT skills and guidance needed to evolve core technology to the point where it supports digital-transformation-ready connected solutions, and it needs to provide the advice that business leaders need, in order to understand and capitalize on the many business benefits that are gained from employee empowerment.

Bridging the gap
Laozi once said that “the journey of a thousand miles begins with one step”. With respect, though, he was not correct: a long and complex journey begins with a vision, and a plan, and proceeds to the steps along the path. What does this mean to growth-focused channel members looking to help clients to ‘bridge the gap’ to employee empowerment?

• From a business perspective, ‘bridging the gap’ means helping executive clients to see the productivity, profitability, agility and innovation potential of an empowered workforce – and perhaps, illustrating as well the possible threat associated with being late to the digital transformation party
• From a technology perspective, ‘bridging the gap’ means delivering a roadmap that shows how current infrastructure can follow a logical path to support for social, self-service and connected, ubiquitous data while enhancing security, backup, audit and DR
• From a skills perspective, midmarket firms need access to professionals who can define the path from basic IT potential to real business benefit – and will find that guidance in the channel, from firms that have themselves made the leap into the digital transformation (DX) future.

Employee empowerment begins with a vision – and a plan. Midmarket clients urgently need advisors who can deliver both – and the business benefits that are unlocked by DX-empowered employees.

Senior executives in midmarket organizations care about digital transformation – and as a result, channel members can leverage their understanding of key Digital transformation objectives and roadmaps into long-term, sustainable relationships with senior decision makers.

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