‘We are starting from a position of strength: We have leading end-to-end solutions, a world-class supply chain, unmatched Global Services, and unparalleled customer reach with the largest GTM [go-to-market] engine in the industry — giving us unstoppable differentiation in the marketplace,’ Dell’s Bill Scannell and John Byrne told employees in a memo.

Dell Technologies wants to seize a $2.1 trillion IT infrastructure opportunity and it is ripping up the old framework to get there by “centralizing” its go-to-market strategy behind the idea of “one sales team, structure, and culture,” according to an internal memo.

“We are starting from a position of strength: We have leading end-to-end solutions, a world-class supply chain, unmatched Global Services, and unparalleled customer reach with the largest GTM [go-to-market] engine in the industry — giving us unstoppable differentiation in the marketplace,” wrote Dell’s Bill Scannell and John Byrne in a coauthored memo to Dell employees sent this past Monday.

Dell is taking a “big step” towards creating that one sales team by merging its consumer and small business and client solutions group into Global Sales, the memo states. The company is creating a new AI Select sales team, and hiring more inside sales reps, who will work with both customers and partners to chase deals.

The two wrote that Dell’s plan is to grow faster than the market by meeting customers and partners “online, virtually, or in person” to “unlock the value of modern IT.”

“We have a $2.1 trillion total addressable market, including emerging sectors like AI, and we are committed to capitalize on these opportunities,” the memo stated.

During the company’s May 30 quarterly earnings call, Dell COO Jeff Clarke said it was focused on winning deals at the cost of margin, knowing that over time the won customer would return that cash through a deeper and wider spend on Dell products.

Wall Street punished the stock following the call with Dell shares losing a quarter of their value in a week as the price dropped from $179.21 on May 29 to $132.03 on the following Monday.

Scannell and Byrne’s memo to Dell employees put a roadmap to Clarke’s confidence on the earnings call, while also seeming to address Wall Steet’s demand for better cost management with the announcement of layoffs targeting sales.

After Dell reported layoffs Monday, portions of the memo were first reported by Bloomberg. Business Insider obtained it and published it in full. Dell provided CRN with a copy.

Dell Technologies stock tumbled further this week, shedding nearly half its value since that May high. The stock was up a little more than 2 percent during trading Thursday to $90.29.

What follows is a more in-depth look at the memo and further details on Dell’s restructuring efforts.

What’s In The Memo

According to Scannell and Byrne, a year ago Dell Technologies began a “Modern Dell” effort to simplify operations and reimagine how the company works and engages with customers.

“For go-to-market teams, we designed an integrated strategy to drive even more customer and partner satisfaction, create new opportunities, redefine what’s possible and set the stage for winning over the next 40 years,” they wrote. “We aim to grow faster than the market by seamlessly meeting our customers and partners online, virtually, or in person, to unlock the value of modern IT and AI for their organizations. For our sales teams, we’re working to free your time to spend more of it on learning and selling. When you spend more time with customers and partners, you know them better, engage further, win more and drive even better outcomes.”

Scannell is Dell’s global president of sales and customer operations. Byrne is the company’s president of sales, global regions, Dell Tech Select. The two co-wrote the memo that outlined how the company’s sales structure would be shaken up.

Dell Technologies will centralize sales into one organization with the Consumer and Small Business (CSB) and Client Solution Group (CSG) sales teams joining its global sales operations. To simplify its approach to its thousands of customers, Scannell and Byrne said the company would consolidate accounts by size and into fewer segments, coupled with a “tightened” ratio of account executive to customer with an “inside sales”-led motion.

“To build on our strengths, realize our vision, and empower you to sell and win, today we are announcing a new Global Sales organizational structure and operating model,” they wrote.

To go to market in AI, the company is creating a new AI Select sales team led by Scott Millard. He will report to Byrne and focus on select accounts.

Stock Price

Dell’s ties to AI juggernaut Nvidia are deep and rich. Their CEOs talk about decades of working together and have shared the stage to launch AI products together that can deliver the on-prem generative AI solutions demanded by enterprises.

Yet, for all the GenAI verve on Wall Street, none of it is helping Dell’s share price.

One of the theme’s that Michael Dell repeats in his book ‘Play Nice, But Win’ — which chronicles the company’s rise into a publicly traded company, and its temporary exit from the markets — is that Wall Street does not understand Dell’s value relative to the global spend on IT.

During its first quarter earnings call in May, analyst Toni Sacconaghi with Sanford C. Bernstein and Co. asked Dell COO Jeff Clarke if the margins on its $1.7 billion in AI server deals during the company’s first quarter were zero.

“If I just looked year over year at the ISG business, storage was perfectly flat. AI servers went from zero dollars to $1.7 billion, which sort of suggests that traditional servers were flat,” Sacconaghi asked during the May 30 call. “So really the only thing that changed was you added $1.7 billion in AI servers and operating profit was flat. So does that suggest that operating margins for AI servers were effectively zero?”

Clarke acknowledged that margins could be better, but pushed back that getting the deal win will be worth lost cash up front because history shows Dell’s stickiness will result in higher revenue as technology spend and sprawl increase.

“We’ll take that deal every time,” Clarke said on the call, “because we know over time winning a new customer, we can sell the breadth of our portfolio.”

Since that call, the company’s share price has been cut nearly in half, tumbling from a high of $179.21 on May 29 to today’s $90.03.

Meanwhile there has been no change to the competitive market share that Dell holds over its rivals at HPE and Lenovo.

Dell’s Number One Positions

Dell Technologies relentlessly chases share throughout the technology sector with the aim of growing faster than the market.

As of the first quarter it held the number one positions across 16 infrastructure categories tracked by IDC, according to slides it published along with its first quarter earnings.

Dell holds the leadership position in sales of x86 servers, with a 13.5-percent unit share and 13.7-percent revenue share. It also leads the market in the sale of high-end gaming PCs, PC Monitors, and it’s number one in PC workstations with a 43.4-percent share.

In storage, Dell has the number one position in external RAID enterprise storage with a 24.8 percent share. It is first in high-end RAID storage with 34.9 percent share, mid-range RAID storage also owned by Dell with 25 percent share. It was number one in storage software with a 9.6 percent share, first in converged systems with 53.1 percent of the market, first in hyperconverged systems with 33 percent of the market, first in purpose built back up appliance with 41.2 percent of the market.

Scannell told CRN in May that each of those categories has a massive upside that he needs partners to win.

“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,” he told CRN during Dell Technologies World in May. “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,” he continued. “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.”

Jobs Cuts And New Hires

The company is not releasing the number of employees it is cutting in this most recent round of layoffs. Last year, Dell eliminated 13,000 jobs in two rounds of cuts. The company’s total headcount fell from 133,000 to about 120,000.

The Round Rock, Texas-based technology giant’s annual sales came in at $88.4 billion for the 2024 fiscal year, off 14 percent from a year before and $13.5 billion less than its record $101.9 billion haul in 2022. Dell’s most recent fiscal year ended Feb 2, 2024.

At the same time, Dell Chief Partner Officer Denise Millard told CRN that even as the company is restructuring, it is hiring new employees to drive growth.

“We’re also going to be adding additional account executives and inside sales reps,” she said. “We see a massive opportunity for us to work with our partner ecosystem to drive demand generation, to promote cross-sell and, of course, win new business in the market. We are also creating a new AI select team. This team is going to be global. It’s going to be focused on the largest AI organizations across the world, specific to GPU business.”

“Then, we are also introducing a new global SMB organization where we are bringing together our marketing and intelligence teams to help drive insights around management as well as broadening our inside sales motion there,” she said.

A New Global Partner Ecosystem Model

Dell is bringing in a new role called the regional partner ecosystem leader that will be responsible for deepening channel relationships in EMEA, Latin America and APJ market, Dell’s chief partner officer Denise Millard (pictured) told CRN.

“Especially outside the US. The markets are complex. We’re taking the channel country leaders and we’re mapping them to the country managers, so the country sales leaders and the channel ecosystem leaders feel joint accountability to driving growth through and with our partner ecosystem.

The new regional partner ecosystem leaders are:

• EMEA: Alex Brousse, Partner Ecosystem Lead, EMEA, Dell Technologies
• LatAm: Fabiano Ornelas, Partner Ecosystem Lead, Latin America, Dell Technologies
• APJ: Manish Gupta, Vice President, APJ Partner Ecosystem, Dell Technologies

Millard said Senior Vice President for North American Channel Sales Gregg Ambulos will continue to lead channels and Billy McCarthy remains as VP of Americas, Global Alliances.

“So that regional partner ecosystem leader is in all of the markets outside the U.S. No change in the U.S.,” she said.

Additionally, the company will introduce resources aimed at helping partners who have specific strengths to deepen their competencies.

“This is all in the spirit of streamlining organizational structures to really bring and drive growth,” Millard told CRN. “You and I have talked about the various partner types…They’re resellers. They’re integrators. They’re service providers. They’re hosters. We acknowledge that. By bringing this under one person, a regional partner ecosystem leader, they will have responsibilities to see across this entire ecosystem.”

Dell Reseller Partners See A Deeper Commitment

Gary McConnell, CEO of Dell Platinum partner VirtuIT Systems of Nanuet, N.Y., told CRN on Monday that he views Dell Technologies’ restructuring as a sign the company is engaging more with partners. He also is encouraging those cut to look to the channel for jobs.

“We’re reading this as Dell leadership truly committing to leaning on their channel partners more; they’ve added incentives and are now reorganizing resources,” he said. “There’s uncertainty whenever restructuring happens, but we’re hopeful that those impacted will land in the channel and help us continue to drive customer value through Dell.”

C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company and a Dell Titanium partner, said that Dell Technologies has long signaled its intent to become a leaner company that will rely more heavily on channel partners.

“We are seeing stronger Dell channel engagement in all areas of the business from commercial to enterprise to new logo acquisition,” said Howdyshell. “Dell’s channel commitment is stronger than ever even with this restructuring. This is part of a bigger picture Dell has laid out to reduce its headcount.”

Howdyshell complimented Ambulos for providing strong channel partner engagement and leadership. “Gregg has stood out as a channel leader at critical times for Dell,” said Howdyshell.

Bob Venero, president and CEO of Future Tech, Fort Lauderdale, Fla., No. 76 on the CRN SP500, said he sees the cutbacks as part of a no-holds effort by Dell to leverage the power of AI to increase productivity.

“Dell is rightsizing by leveraging AI and its own technologies to become a leaner company,” he said. “From my perspective this is only going to benefit the channel as Dell relies more heavily on the channel to drive sales of their innovative products and solutions. We see Dell continuing to double down on the channel. Dell has grown its channel presence exponentially over the last two decades. As the Dell portfolio continues to get stronger, more and more partners are leading with Dell from the desktop to the data center to the cloud.”