Dell Product SVP Rahul Tikoo on Channel Strategy, Supply Chain, Sustainability and More
The boom in the PC market over the past two years may finally be slowing down, but Rahul Tikoo says Dell Technologies is poised to take even more market share from rivals as the company focuses on building better machines for a hybrid working life.
Tikoo, senior vice president of Dell’s customer product group, highlighted the PC maker’s position as the U.S. sales leader with 27.1% market share in the first quarter, according to research firm Gartner. . The Round Rock, Texas-based company posted 5.4% year-over-year growth to 5.1 million shipments for a sixth straight period of growth.
Meanwhile, Dell faces the same economic climate as its rivals, with historic inflation coupled with continued supply chain grunts slowing the pace of deliveries amid strong demand. Despite this challenging environment, Dell is moving forward 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 distribution strategy going forward?
We are very attached to the chain. About half of our business goes through the canal. Our strategy is really customer-first, what customers want, and then what channel they want to buy from, whether that’s through Dell direct or if they have their own channels. We continue to support our channel partners and sell the solutions our customers want. So nothing has changed in that regard. I think some people misunderstand. … It’s neither. No, these are all routes to what our customers need.
How can channel partners overcome some of the delays caused by supply chain issues?
Unfortunately, supply chain challenges are not new to Dell or the industry. If you think about the last three years and how things have gone, we’ve had shortages of all kinds that we’ve been able to handle very effectively at Dell. Part of that is down to our customer partnerships and channel partners who truly understand what they need. It’s important to clarify the demand side, and having a good understanding of that kind of helps us plan the supply side better. We have strong partnerships with some of our suppliers. What you should expect is that we will continue to navigate as well as in the past, understanding our customers’ demand and ensuring that our supply chains are able to meet that demand. With the latest lockdowns we are seeing as a result of COVID in parts of China, this is going to have some effect in terms of extended order times, but we are still producing products.
What can we expect in upcoming professional products and how will these machines support increased hybrid work?
Even before the pandemic, we were talking about workforce and work transformation as an outcome, not a destination. We’ve been talking about it for almost a decade now. And if anything, all the pandemic has done is accelerate this workforce transformation. People working from anywhere, that was 10 years from now. But at the rate we’re seeing now, it’s accelerated dramatically. There are a lot of people working from anywhere, from home, remotely. And I think that’s the new way of working. As people have learned new and effective ways to collaborate, these methods were unheard of before the pandemic. The employee experience becomes a central element of this new way of working. People are demanding better cameras and better speakerphones, better connectivity and more performance from their devices. And the composition of the workforce has changed dramatically. There are many more millennials and Gen Zs in the workforce. And they belong to the digital generation. These are people who grew up with smartphones and tablets, so they expect the same experience from their devices at work. From a wallet perspective, performance becomes central, all of this has increased the demand on the PC. All of this leads to significant performance improvements in every new product we release. We invested in collaboration features, better cameras. … Better connectivity has become essential. So make sure we have Wi-Fi 6 available across our portfolio, both consumer and commercial lines [has been key]. With Wi-Fi 6, we think of it as a sort of seven-lane car-free highway – there’s plenty of bandwidth available and Dell has its entire portfolio on Wi-Fi 6.
Why should a channel partner choose Dell over competitors like Lenovo or HP?
It boils down to several things. First and foremost, Dell is a technology partner that meets customers’ end-to-end technology needs, from endpoints to security and infrastructure, whether it’s servers, storage or cloud. We are truly an end-to-end provider and support and trusted partner for our customers. Thinking about customer businesses, you could say everyone has the same parts and parts, everyone has Intel or AMD processors and Nvidia GPUs. But that 5 or 6% that we add to the PC is extremely critical. No one else in the industry has Dell Optimizer. If you really believe that employee experience is essential and understanding employees and the way they work is essential and then having the right experience for them, you want the smartest PCs, and that’s where Dell comes in.
What is the best way for a Dell partner to succeed in today’s market environment?
I think the most important thing is to engage in dialogue with our end customers to understand what the problem we are trying to solve is. I think a lot of customers are trying to figure out what they need to invest in from a technology perspective. So it’s crucial to be that trusted partner and understand what they need. I think a lot of our channel partners really appreciate being close to their customers, understanding their customers’ needs and helping them translate that into a solution. When I say “solution”, it really means that we understand what your staff needs (the laptop, the accessories around the laptop, whether it’s screens, peripherals or headsets, cameras) and the longer-term support they need to keep their fleet operational. We’ve gone from 100 offices to 100,000 homes and we need to figure out how we support that change. This is where our Channel Partners can play a very healthy role by not being a box pusher, but by truly understanding their customers’ needs and providing a solution that solves a problem.
Dell has just launched a line of PCs, the Latitude 5000 line, which contains recycled materials. Should we expect to see more efforts in terms of sustainable development?
We’ve been very bold in where we want to go with sustainability, and we have the most durable devices in the industry thanks to these investments. Our goal is to have all of our product lines contain 50% renewable and recycled materials by 2030, which absolutely means you’ll see more of what you’ve seen in the Latitude 5000 series. We’re going to be introducing a heaps of sustainable bioplastics and biomaterials throughout the portfolio. Our strategy has been pretty simple: 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 acquire some of the durable material choices. And you’ll see us extend those material choices across the entire 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 trace of paper in the box which is neither aesthetic nor ecological. When you get your hands on one of our new products, take a look at the packaging. It is truly world class. People are working from home, so they get this product and there’s this box opening ceremony and the feeling that they’ve received a beautiful product. They get this beautiful product with built-in durability.
It looked like Dell had the brightest spot in the Gartner report and you’re reclaiming market share that’s being lost by some of the other PC makers. Was it a surprise?
It is not a surprise. We also gained market share throughout the last year. We won in the market. Because at the end of the day, we listen to our customers and we respond to our customers’ needs with solutions. We are able to meet these needs by having the right supply planning. Our message resonates and our customers see that we meet their needs and they come back to us. I don’t see that changing.
What’s the biggest change you’ve seen in the PC market? And what can we expect in the future?
You can look at home…and you’ll see that everyone has a smartphone. We are also seeing this transition where we are moving from this reality of one PC per household to one PC per person per household. PCs are moving to this smartphone model. Everyone in your house will have one or more PCs. If you work, you’ll have one PC for work and one for home. This year’s forecast is for 350 billion PCs sold. Eight years ago, the average was around 280 million PCs. That’s a pretty high watermark. So I don’t think we’ll see a world where we go back to this world of one PC per household. This is going to continue to drive the growth and the water level that we are seeing in this industry. That’s how we plan our business, and that’s how we plan our product lines.