The PC market’s boom of the past two years may be finally slowing, but Rahul Tikoo says Dell Technologies is poised to take even more market share from competitors as the company focuses on building better machines for a hybrid work life.
Tikoo, senior vice president of Dell’s Client Product Group, pointed to the PC’s maker’s position as U.S. sales leader with 27.1 percent of the market in the first quarter, according to research firm Gartner. The Round Rock, Texas-based company showed year-over-year growth of 5.4 percent with 5.1 million shipments for a sixth consecutive period of growth.
Meanwhile, Dell must face the same economic climate as its rivals, with historic inflation coupled with continued supply chain snarls slowing the pace of deliveries amid strong demand. Despite that challenging backdrop, Dell is forging ahead with a plethora of new product releases across its consumer and commercial PC lines.
Tikoo spoke with CRN about Dell’s product and channel vision for the future.
Can you tell us about Dell’s channel strategy going forward?
We’re very committed to the channel. About half our business goes through the channel. Our strategy is really focused on customers first, on what customers want and then whatever channel they want to buy it from, whether it’s through Dell direct or they have their own channels. We continue to support our channel partners and selling the solutions our customers want. So, nothing has changed in that regard. I think some people misunderstand. … It’s not one or the other. No, it’s all routes to what our customers need.
How can channel partners navigate some of the delays caused by supply chain issues?
Unfortunately, supply chain-related challenges are not new to Dell or the industry. If you think about the past three years, and how things have been going, we’ve had shortages of all sorts that we have been able to navigate very effectively at Dell. Part of that is just our partnerships with customers and our channel partners really understanding what they need. Getting the demand side clear is important, and having a great understanding of that helps us sort of plan the supply side better. We have strong partnerships with some of our suppliers. What you should expect to see is that we will continue to navigate as well as we have been in the past, understanding the demand of our customers and making sure our supply chains are able to meet that demand. With the latest lockdowns that we’re seeing as a result of COVID in parts of China, that’s going to have some effect in terms of extended order lead times but we’re still churning out products.
What can we expect to see in upcoming business products and how these machines support increased hybrid work?
Even before the pandemic, we’ve been talking about workforce transformation and work as an outcome and not the destination. We’ve talked about that for a close to a decade now. And if anything, all that the pandemic has done is accelerated that workforce transformation. People working from anywhere—that was 10 years out. But at the rate we’re seeing now, that has accelerated significantly. There are a lot of people that are working from anywhere—from home, remotely. And I think that’s the new way of working. As people have learned new effective collaboration methods, these methods were unheard of before the pandemic. Employee experience is becoming pretty central to this new way of working. People are demanding better cameras and better speaker phones and better connectivity and more performance out of their devices. And the workforce makeup has changed significantly. There are a lot more millennials and Gen Zers in the workforce. And they’re the digital generation—these are folks that grew up with smartphones and tablets so they are expecting that same experience from their devices at work. From a portfolio standpoint, performance is becoming central, that all has increased demand on the PC. All of this is driving significant performance improvements in all of the new products that we’re launching. We’ve invested in collaboration features, better cameras. … Better connectivity has become critical. So making sure that we have Wi-Fi 6 available across our portfolio, both in consumer and commercial lines [has been key]. With Wi-Fi 6, we think of it as sort of this seven-lane highway with no cars on it—there’s a whole lot of bandwidth available and Dell has their entire portfolio on Wi-Fi 6.
Why should a channel partner choose Dell over competitors like Lenovo or HP?
It comes down to multiple things. First and foremost, Dell is a technology partner meeting end-to-end technology needs of customers all the way from endpoint devices to security and infrastructure, whether it’s servers or storage or cloud. We’re really this end-to-end provider and support and a trusted partner for our customers. As we think about client business, you could argue that everyone has the same pieces and parts, everyone has Intel, or AMD CPUs and Nvidia GPUs. But that 5 percent or 6 percent that we’re adding to the PC is extremely critical. Nobody else in the industry has Dell Optimizer. If you truly think that employee experience is critical and understanding employees and how they work and then having the right experience for them is critical, you want the most intelligent PCs, and that’s where Dell comes in.
What is the best way for a Dell partner to succeed in the current market environment?
I think the most important thing is engaging with our end customers in a dialogue to understand what the problem is we’re trying to solve. I think a lot of customers are trying to figure out what they need to go invest in from a technology standpoint. So, being that trusted partner and understanding what they need is crucial. I think a lot of our channel partners really value that nearness to their customers and understanding their customers’ needs and helping translate that into a solution. When I say ‘solution’ that really means we understand what your workforce needs—the laptop, the accessories around the laptop, whether it’s displays or peripherals or headsets, cameras—and the support they need longer term to keep their fleet up and running. We’ve gone from 100 offices to 100,00 people’s homes and we need to figure out how we support that change. That’s where our channel partners can play a very healthy role in not being a box pusher, but really understanding the needs of their customers and putting forward a solution that solves a problem.
Dell just released a line of PCs, the Latitude 5000 line, that feature recycled materials. Should we expect to see more sustainability efforts?
We’ve been very bold about where we want to go with sustainability, and we have the most sustainable devices in the industry as a result of those investments. Our goal is to get all of our product lines to 50 percent renewable and recycled materials by the time we exit 2030, which absolutely means you’ll see more of what you saw in the Latitude 5000 series. We are going to introduce a bunch of sustainable bio plastics and biomaterials across the portfolio. Our strategy has been pretty simple: to identify how we can move to sustainable materials, get the supply chain working and then scale from there. So, the Latitude 5000 series is a good way for us to land some of the sustainable material choices. And you will see us scaling out those material choices throughout the product line. Look at any product on the market today … you get one of those brown cardboard boxes where the product is wrapped in plastic, the adapters are wrapped in plastic and there’s a bunch of [things to] throw away—a paper trail in the box that’s not aesthetically pleasing and it’s not environmentally pleasing. When you get your hands on one of our new products, take a look at the packaging. It’s really world-class. People are working from home, so they get this product and there’s this ceremony of opening the box and feeling like they’ve been gifted a beautiful product. They get this beautiful product with sustainability built in.
It seemed like Dell had the brightest spot in the Gartner report and that you are picking up market share that’s being lost by some of the other PC makers. Was that a surprise?
It’s not a surprise. We’ve been picking up market share all of last year too. We have been winning in the marketplace. Because in the end, we are listening to our customers and we’re meeting the needs of our customers with solutions. We’re able to fulfill those needs by having the right supply planning. Our message is resonating, and our customers are seeing that we’re meeting their needs and they’re coming back to us. I don’t see that changing.
What is the biggest change you’ve seen in the PC market? And what can we expect in the future?
You can look at your own home … and you’ll see that everyone has a smartphone. We’re also seeing this transition where we’re going from this one-PC-per-household reality to one PC per person, per household. PCs are transitioning to that smartphone model. Everyone in your home is going to have one if not more PCs. If you’re working, you’ll have a PC for work and one for home. The forecasts this year call for 350 billion PCs sold. Eight years ago, the average was about 280 million PCs. That’s a pretty high watermark. So, I don’t think we’ll see a world where we go back to that one-PC-per-household world. That’s going to continue to drive growth and the water level that we’re seeing in this industry. That’s how we’re planning our business, and that’s how we’re planning our product lines.