‘I can’t get at it with our sellers alone. We need the channel as an extension of our sales force and they realize we are committed to them. It’s one plus one equals something much greater,’ Bill Scannell, Dell Technologies president of global sales and customer operations, tells CRN.

Bill Scannell, Dell Technologies president of global sales and customer operations, said the AI arms race is just kicking off and it‘s already driving an “immense” partner opportunity around servers and storage.

“The markets are coming our way. We’ve quickly become the leader in infrastructure running GenAI,” Scannell told CRN. “I’ve heard it described as it’s not the first inning of a nine-inning ballgame. We’re in the parking lot. It hasn’t even started yet.”

The leader in providing the GPU power that runs AI workloads is Nvidia. That company’s CEO Jensen Huang appeared on stage last week at Dell Technologies World to show his support for the Dell servers that host those chips. He was joined by ServiceNow CEO Bill McDermott, whose company is building AI into their enterprise operations software, and just purchased new servers through Dell the week prior to the show — a deal which Scannell said was closed through a few partners.

“Dell is the company to go to for AI. If you need server, storage, networking, call Dell. You can’t get a better endorsement from the hottest player right now in the market, which is Nvidia,” Scannell said. “Think about what Bill McDermott said. He said, our private cloud is 100 percent built on Dell Technologies.”

To shore up channel support as they go to market, Scannell and Dell Technologies ISG president Arthur Lewis debuted Partner First For Storage last August. Dell’s core sellers now get better incentives to close storage deals through a channel partner.

“Think of the position our partners are in,” Scannell said. “We’re the market leader in storage and we’re leaning in with our partners. We’re the market leader in server and we’re leaning in. We’re the market leader in commercial PCs and we’re leaning in. We’re the market leader in GenAI. We’re leaning in.”

Dell’s AI Factory with Nvidia incorporates all the layers of hardware and services an organization needs to build an AI practice and gives them an easy-to-sell framework that one partner compared to T-shirt-sized small, medium and large offerings.

“By having this validated design, called the Dell AI factory with Nvidia, we have tested all the different configurations of servers and storage and networking under stress, under workload, so that we know it works,” Scannell told CRN. “If you think of the early mortality of some of the components we discover by stress testing, the reliability of what we are implementing in the field for Nvidia and AMD GPUs is much higher than anyone else.”

The change to Dell’s storage sales motion has led to new customer deals for Titanium partners such as Columbus, Ohio-based Advizex and platinum partners like Nanuet, N.Y.-based VirtuIT. Officials at both companies told CRN that Dell sellers are engaging early with their sales teams and the two are approaching prospects together in the field.

“We need the channel as an extension of our sales force and they realize we are committed to them,” Scannell said. “It’s one plus one equals something much greater.”

Dell Technologies World announcements included a liquid-cooled, and more compact version of its market leading servers that power generative AI efforts. Dubbed the XE9680L, the smaller form factor allows for more Nvidia’s highest-end GPUs per rack in the data center and in on-premise environments, which is a spec that got a lot of love from Nvidia CEO.

“Don’t seduce me with talk like that, 72 Blackwells in a rack,” Huang told the crowd at Dell Technologies World to laughter. “These are giant supercomputers that we are going to build at scale, deliver at scale and help you stand it up at scale. So what appears to be incredibly complicated technology, we’re going to make it easy for all of you to enjoy.”

In addition to the new Dell AI Factory, Dell showed off new storage capabilities for partners, including the newest software advances in PowerStore 4.0, which not only come with greater efficiency and better speeds but because the buffs are software-driven partners can upgrade their customers’ existing PowerStore installations.

If the customer upgrades the hardware to Dell’s new PowerStore models, it can unlock 60 percent better performance, higher efficiency quad-level cell architecture and 5-to-1 data compression.

“So it’s more flexible. Reliability is off the charts, six-nines-plus availability. So you take that product and you take our Partner First Strategy For Storage and you put them together and that in itself is going to be massive,” Scannell said.

Dell purchased EMC in 2016, a deal which also brought VMware. The close relationship between the two companies led to deeply embedded product designs such as Dell VxRail, and pricing agreements that benefited Dell.

However, Dell spun VMware out into an independent company in November 2021. About seven months later, chipmaker Broadcom announced plans to buy VMware for $69 billion in cash and debt. The deal closed in November and the Palo Alto, Calif.-based Broadcom has quickly announced several pricing and go-to-market changes that have upset customers and partners.

In the infrastructure space, many customers are looking for VMware alternatives Scannell said. Dell’s PowerFlex gives partners a choice for customers.

“We built an appliance that you can run, our PowerFlex, which is hypervisor agnostic,” Scannell told CRN. “You can run RedHat on it. You can start to build a virtualized environment that’s not VMware. If you are looking for optionality, we can help you out with that. The best way to start is to put an appliance on the floor so that every customer has an opportunity to use a new architecture, so they can start migrating to that. Think about a brownfield being a VMware environment and a greenfield being a new environment.”

Scannell spoke with CRN at Dell Technologies World 2024 in Las Vegas. Here is a transcript of the interview, edited for space and clarity.

What’s your early read on Partner First for Storage?

It’s going really well. It’s going ahead of schedule and ahead of plan. I think the inflection point was this week when we announced PowerStore Prime.

It is a killer product. It takes all the great things we had with PowerStore, but now it has better data efficiency, best in the market, five to one, guaranteed. It is much faster. Up to 60 percent faster. It’s the most flexible architecture. We can add one QLC drive, versus some of our competitors you have to add 16 at a time.

So it’s more flexible. Reliability is off the charts, six-nines plus availability. So you take that product and you take our Partner First Strategy For Storage and you put them together and that in itself is going to be massive.

The fastest growing part of the market is the midrange and that’s where it fits in. But taking nothing away from PowerMax on the high end and taking nothing away from PowerFlex which is our software-defined storage, taking nothing away from our UDS platform, all of the products that customers love. The portfolio has never been stronger. We’re sending a very clear message to partners that 99 percent of the market is yours for the taking.

I’ve been very clear when we got together here and with partners a few weeks ago. I said, ‘No free lunch.’ We expect you to do some share shift and bring some opportunities to us that you find and they get it. They’re finding deals for us so it’s a multi-year commitment. It’s a multi-year journey. We want to see continued progress, every day every month, every quarter, so we’re pleased. But as Michael (Dell) says, “We’re pleased, but never satisfied.”

When I talked with Arthur Lewis yesterday I asked him about Partner First and at what point does the carrot become the stick and he said he would like to see partners selling more security. Are there areas like that that you’d like to see partners leaning more into?

Did you go to Michael’s keynote?

Yes.

Did you hear what Jensen said?

Yes.

Dell is the company to go to for AI. They’re our trusted partner. If you need server, storage, networking, call Dell. You can’t get a better endorsement from the hottest player right now in the market, which is Nvidia.

Think about what Bill McDermott said. He said our private cloud is 100 percent built on Dell Technologies. Just again last week they placed a very large order through our partners. Three or four partners participated. We leveraged partners.

We’re number one in x86 servers. We’re winning at a massive rate. Can’t say anything about the current quarter because we’re in a quiet period, but just look at what we’ve delivered over the past several years. We went from being a distant number two in x86 servers to number one by a longshot.

Dell Chief Partner Officer Denise Millard (pictured) had some big news to share on stage at the partner panel where she announced client devices now qualified for partner of record. Why the change there?

Partners have been confused. We started off selling PCs direct to the end-user customer. Now whatever route to market the customer is looking for they can have it. If they want it to occur through partners, that’s great. If they want to have it provided directly through Dell, that’s great. Like anything, you can’t force customers to buy it from a partner if they don’t want to.

What we’re saying is, we want to do our business with partners on the client side. What better way to show that, then announce partner of record like we have for server and storage, for client.

What it says is if you bring us into an opportunity, it’s yours going forward. It’s your account. As long as you’re going to continue to position Dell products, then we’re going to continue to sell through you.

Do we want to grow our client business direct faster than the market? Yes we do. Do we want to grow our client business faster than the market? Yes we do. We have an omni-channel route to market.

Partners are already itching to have you open up servers to Partner First. Is there any talk about that?

I say this to customers and partners: the markets are coming our way. We’ve quickly become the leader in infrastructure running GenAI. I’ve heard it described as it’s not the first inning of a nine-inning ballgame. We’re in the parking lot. It hasn’t even started yet.

This is going to be a multi-year opportunity for Dell Technologies and our partners, Nvidia, AMD, Intel, Qualcomm. We have great partnerships and we have great infrastructure. Nvidia GPUs run better on our servers and more reliably on our servers because we designed it to work with Nvidia GPUs. Whether it’s air-cooled or direct liquid cooling, we built a better mouse trap.

The XE9680L, which has the liquid cooling you mentioned, it can also hold more of the Nvidia Blackwell chips per rack. How important is that for partners who install these large infrastructure projects?

Data center floor space is a precious commodity right now. So the more dense you can make the servers, the more you can put in a rack, the less expensive it is for floor space, for power, or cooling. The biggest challenge with these AI workloads right now is the amount of power required to run them.

There’s 47 gigawatts of power around the world today. That’s expected to grow by 2x in the next several years. We have customers looking for 400-megawatt data centers, 800-megawatt data centers, a gigawatt data center. If you think since the beginning of time there’s 47 gigawatts. We have customers asking for 400, 800, a gigawatt.

And it’s just getting going.

Think of the position our partners are in. We’re the market leader in storage and we’re leaning in with our partners. We’re the market leader in server and we’re leaning in. We’re the market leader in commercial PCs and we’re leaning in. We’re the market leader in GenAI. We’re leaning in.

Every knowledge worker is going to want an AI-enabled PC.

Dell is well-positioned to take share. We have 17-percent share in commercial PCs. We have 20-percent share in server and 30-percent share in storage, which means there’s 83-percent upside in PCs, even if the market wasn’t growing, just in taking share from our competitors. There’s 80-percent upside in server and 70-percent upside in storage. If they weren’t growing, just in taking share.

Now, they’re growing and they’re taking share. The opportunity is immense. I can’t get at it with our sellers alone. We need the channel as an extension of our sales force and they realize we are committed to them. It’s one plus one equals something much greater.

There does seem to be greater speed and urgency around this. Quicker time to deal, quicker time to close. Michael talked about the urgency around this. How are you looking at it?

The more we modernize our systems and make them easier to do business with, it’s time you are buying back. Too much of our sales time is spent in non-selling activities. That’s a great example of one. If we can optimize and automate those processes then it means more time in front of our customers, which means more revenue.

When you look at the announcements. If you’re a platinum partner, maybe not the biggest, and you’re taking in the show, where do you start with some of the announcements they’ve seen here?

Yesterday I met with one of our partners from Germany. They were talking about the growth of their business. And they said in Germany the mid-market is a little sluggish right now and that’s why we don’t think it’s going to grow as fast as we’d like to.

I said, well how many of your customers are VMware shops are hunting for optionality? He said most of them.

I said well we built an appliance that you can run, PowerFlex, which is hypervisor agnostic. You can run RedHat on it. You can start to build a virtualized environment that’s not VMware. If you are looking for optionality, we can help you out with that. I said the best way to start is to put an appliance on the floor so that every customer has an opportunity to start migrating to that.

Think about a brownfield being a VMware environment and a greenfield being a new environment. Then think about the PC refresh. How many have new PCs that might be four, five years old. Go put AI-enabled PCs in there.

The market doesn’t have to be growing for us to be successful.

I gave him three or four more examples and when I started adding it up — it’s a partner that we do $600 million a year with, and they have aspirations to get to a billion — I laid out a plan where there’s five or six billion more they could go after. They walked out saying you’re right.

That’s the type of opportunity that’s out there. We’re playing in a trillion-dollar space, and we’re a smaller than $100 billion business. There’s more opportunity to get and there’s no better way to go after it than with our partners everywhere we play, server, storage, AI.

Going back to that small partner around AI how should they be looking at the opportunity?

AI isn’t easy. People have no idea where to start. Do they want to create their own large language models? Do they want to use someone else’s? Where do you start from a GPU perspective? How many? What kind? Where do you put them? Whose rack do you put them in?

We can come in with consulting services and help shape the discussion around what our customers are trying to do. What are the use cases for AI? Let’s pick three or four and do those really, really well.

By having this validated design, called the Dell AI factory with Nvidia. We have tested all the different configurations of servers and storage and networking under stress, under workload, so that we know it works. If you think of the early mortality of some of the components we discover by stress testing, the reliability of what we are implementing in the field for Nvidia and AMD GPUs is much higher than anyone else.

If you are spending this much money to set up your AI infrastructure you want to make sure it has the highest availability, that you have predictive diagnostics built in leveraging AI and you have the Dell service network so if it breaks, someone shows up with parts to replace it.

That’s a huge advantage we have versus all the other competitors in our space. That’s why there’s a flight to quality. We will absolutely win there.