The indirect way

Hardware giant Dell is renowned for its efficient direct sales operation. However, in the Middle East, the indirect channel remains the primary go-to-market model for Dell.

  • E-Mail
By  Stuart Wilson Published  November 22, 2006

Engagement model|~|bazsq2ndgt200.jpg|~|Hazem Bazan, Dell|~|Hardware giant Dell is renowned for its efficient direct sales operation. However, in the Middle East, the indirect channel remains the primary go-to-market model for Dell. Hazem Bazan, formerly SPO manager at HP Middle East joined Dell as UAE country manager earlier this year. GITEX Times spoke to Bazan to discover how the ‘indirect from Dell’ model works in this region... GITEX TIMES: Why did you decide that the time was right to move from HP to your new position at Dell? HAZEM BAZAN: I think it was a natural move — change is always good. If you want to do something new and capitalise on your experience, then why not move somewhere else and learn new things. This is what made me think about moving from HP. Why Dell? It is a famous company through its leadership in the industry and it is definitely the industry leader today on the client side. The environment is totally different to HP as well. It is a very dynamic and highly active environment, which I like and it is quite challenging as well. This is what you have to search for: new challenges in a motivating environment. GT: Talk us through Dell’s approach to channel building and sales strategy in the region? HB: I will talk about what Dell is today. Dell is a direct partner with business relationships. We do all of our business here in the Middle East through partners and that is because of the nature of the region and the dynamics of the market. No vendor can deny the value of the partners in this region in terms of relationships, integration abilities and the ability to reach the customers. It is definitely something that we value as a vendor and that is why the route-to-market is through partners. GT: How clearly defined and structured is the Dell channel strategy for the Middle East? HB: Well, in terms of the channel structure, let’s just say that there is room for growth ahead of Dell. The company has huge potential for growth if we do the right things and I believe that we will. Michael Collins, myself, Dave Brooke and the other senior managers at Dell in this region are working on how we utilise our internal resources, our channel and our go-to-market model even more in the future. There is an excellent opportunity for growth and also challenges as well. We are in the process of defining the route-to-market and it is not going to be different — we will continue to work with our partners. GT: So, is Dell interacting directly with its enterprise customers in the Middle East? HB: The thing that I discovered when I joined Dell — and it is something that Dell is taking into careful consideration — is making sure that we get closer to the customers. This can be through channel partners or through the relationships that Dell has with large enterprises. In the SMB space it could be through a one-to-many channel approach. The goal is to be closer to the customers; to listen to the customers, to provide the value to the customers whatever sector they are in — be it enterprise, SMB or even consumer. GT: How easy is it to mix direct customer touch with an indirect sales model? HB: It is no different to what other vendors are doing. It is all about delivering what the customer wants and delivering value to them. The vendor that excels in doing this by offering the right route-to-market and finds the right ways of using their internal capabilities such as custom configuration will be the fastest to customers and also the most efficient. That’s what it is all about. GT: Direct sales and marketing engagement with enterprises is all well and good. Does Dell really have the reach and touch through its channel to target SMBs and consumers? HB: In this region we will adopt whatever model suits the needs of the customer and the dynamics of the market. That is the beauty of the Dell model. It is about what fits best for a particular region and there is the freedom to build the appropriate model. GT: Dell is constructing a new assembly facility in Poland. Will this be used to supply product to the Middle East or will it still come from Limerick, Ireland? HB: Having the facility in Poland is an extra value-add for Dell. Both of the facilities that you mentioned are value-adds that we can utilise for the Middle East. It does not matter which facility we use, it is all about what makes sense for the Middle East market and is most efficient. I visited the facility in Limerick and it is a work of art when it comes to assembly and supply chain efficiency. I was highly impressed by what I saw and it is different to other models. Dell’s decision to replicate this sort of facility in Poland is another value-add for our operations in the Middle East. GT: Other A-brand vendors such as Fujitsu Siemens, Acer and your former employer HP have invested in local assembly in the Middle East. Any plans for Dell to follow suit as it invests more in the region? HB: If you look at Dell two years ago and how many staff were in this region and how many there are now, it has almost tripled. What Dell is doing is making the investment on the ground. Dell is looking at the Middle East as one of the fastest growing markets and is investing a great deal here. That has nothing to do with assembly but it is all about commitment and investment to the region. In terms of assembly we will do whatever is necessary but will follow the dynamics and demands of the Dell model and the direction of the markets. There is no one correct way and there are always multiple methods that can be used to reach your goals. I have been at Dell for two months now and have seen how important efficiency and productivity actually are to the company and what it wants to achieve.||**||Partner loyalty|~|baztallgt200.jpg|~|Bazan: "In the UAE we are in a very strong position - our partners are efficient and they have excellent reputations."|~|GT: How important is partner loyalty to Dell and how do you see the channel evolving in the UAE? You have partners such as KIT and Emirates Computers that are not really distributors in the traditional broadliner mould? HB: I believe that loyalty is a key element, whether it is to Dell or any other vendor for that matter. Even in my previous role we looked closely at channel loyalty and I know that it was often hard to achieve. Having loyal partners is definitely a plus and besides loyalty the quality of those partners is also important. In the UAE we are in a very strong position - our partners are efficient and they have excellent reputations. However, that does not mean that there is no room for further development. There is always room for the development of partners and the route-to-market and that is what I will be working on. These are points that Michael Collins, the team and myself our working through at the moment. Loyalty is one element but channel development, channel reach, channel resources and the evolutions of the route-to-market — that is the full package. You have to make sure that you are developing the overall package. GT: So should we expect to see the appointment of additional distribution partners in the UAE? HB: I think it is far too early to comment on that right now. So far, from what we have seen, there is a great deal of development left to do with our current partners. I am not at this stage now of looking at the potential for new partners — especially after just two months in the job. I still have much more to discover and assess. Looking at the current situation, there is significant room for development alongside our current partners and that is the priority. GT: Second tier resellers sometimes still have a lingering fear of disintermediation further down the line when it comes to working with Dell. Can you put their minds at rest on this point? HB: What I can say is that we will adopt the best and most efficient route-to-market whether this is a one-tier or two-tier model and this brings resellers into the picture. Where you have resellers that don’t have the mechanics or the bandwidth to work directly with Dell then we make sure that there are ways to work with them through distributors. We have already started working on this in the UAE and we will not miss out on the opportunity to work with second tier partners. GT: Does the Dell channel programme have partner categories and specific rebate and incentive structures? HB: We do have specialisation and Dell does that in a proper way. There are systems integrator partners, volume partners and distributors as well. This is the basis for building a proper route-to-market and this is where we are starting. This is already in place for Dell and we will continue to build on it. GT: How do you assess Dell’s position in the UAE market? HB: The partners have done a great job to date and this is something that we will develop to ensure that we get closer to the customers. We have made excellent progress in the last couple of years but there is still more to do. The potential is there in the market for Dell to grow and I see no reason why this will not happen if we continue to do the right things. The leadership team that Dell has and the corporate culture have impressed me greatly. The speed and the business agility are in place. Nobody gives you a manual at Dell; you have the freedom to do whatever is necessary to achieve the company’s goals. GT: Looking at the IDC figures for the second quarter of 2006 in the UAE, Dell was the fastest growing PC vendor based on sales across all form factors. Can this be sustained moving forward? HB: The sky’s the limit. I think the main point to make about the market is that in every segment, as we mentioned, there is no vendor that can say they have got everything right. There is room for further growth in each one and this is what we are looking at right now. One of the key areas that we are working on is in the enterprise platform space. We are putting together the right tools and I am very excited about what we are doing as a team in the x86 platform space. I’m very confident about the potential in this segment for Dell. It will be a challenging area but also a fruitful one for us as well. GT: What’s your view on partner profitability for the Dell channel and are you pleased you took on the UAE manager role? HB: I am still looking into it but I am very impressed by what the partners are doing with Dell. In terms of partner profitability it is definitely on the right track. It is definitely on the positive side with Dell. The Dell team is a full machine; it is very effective and highly efficient. We have to do the right things and make sure that we do them right. You will see a lot more resources coming to Dell in the Middle East and we will have more and more people in the team. I am very happy to be at Dell.||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code