Market Moves #DellTechnologies Chief Marketing Officer @JeremyBurton says the company is on a mission to increase its storage market share, and strategies are in place to do so even as infrastructure chief David Goulden leaves the company. The company announced Friday that Goulden would leave at the end of its fiscal year in early February. His departure comes a year after #Dell 's $58 billion acquisition of #EMC, where Goulden led the Information Infrastructure division. #DellEMC is facing flat sales and decreasing demand in its storage portfolio, while its server and networking business grows briskly. Goulden last week discussed the sales pressures facing Dell EMC's storage business, and outlined a plan to hire hundreds of salespeople and make adjustments to internal salespeople's compensation to stoke storage demand, especially in the all-important midmarket segment. Goulden will be replaced by Jeff Clarke. The appointment will make the 30-year Dell veteran the head of both the company's Client Solutions Group and Infrastructure Solutions Group. Burton discussed Goulden's decision to leave the Dell Technologies, as well as the company's strategy and outlook for the storage, server and cloud markets. What follows is an edited excerpt of his interview with CRN.
What does Dell EMC have to do to secure its position in all-flash against a competitor like Pure Storage?
In all-flash, we're still No. 1 by quite a margin. Now, obviously, we want it all. I still don't think we've fully maximized the Dell distribution channel. EMC has been very, very adept at going to the enterprise customers both direct and with our channel partners. The midmarket is a real area of opportunity. On our latest earnings call [CFO] Tom Sweet outlined a plan to add a lot more capacity in the midmarket. We do think there's an opportunity there, and we think the midmarket is a faster-growing segment. Our growth plan is midmarket for all-flash. That's how we take our share from 30 to 40 percent to 50 to 60 percent. We've got to be successful in the midmarket. Clearly, the channel is going to be a huge part of that.
Midmarket is a huge range for you, between $5,000 and $250,000. How do you parse that out?
[President Global Sales and Customer Operations] Bill Scannell has the top 3,000 accounts in enterprise. [President and Chief Commercial Officer] Marius [Haas] has commercial. We've got five tiers, and I'd say we're looking at tiers two, three and four as really the area where there's a lot of opportunities where we haven't really had the level of storage expertise that we need to drive the growth we want.
How is Dell EMC changing compensation plans for its sales teams in order to drive that growth?
It's tweaking as much as anything. What you always strive for is the optimal mix. We have many different products that have many different margin profiles. The margin on a laptop or a server is very different than the margin profile of a storage array. As much as we have been very aggressive at incenting the teams to cross-sell – meaning if you're in a storage account, sell servers and client and if you're in a server account, sell storage – the compensation tweaks have been put in place to make sure we get the right mix of products. We've been aggressive about cross-sell, and that's why revenue has been over-achieving. Another thing we've been really aggressive about is the utility model. The comp changes are geared toward moderating the mix.
What do the compensation tweaks look like?
The best example would be our server business. It's grown like gangbusters. The margin profile on servers is different than the margin profile on storage. If a dollar is just a dollar for the sales team, they're going to gravitate toward the thing they can sell most easily. The goal of every sales team is to hit your quota as efficiently as possible. We've got folks really aggressively going after the cross-sell in servers and client, particularly in the enterprise space where we've got great relationships. So, it's not that we want to dis-incent people from selling those things, we just want to incent them to do more to push the higher-margin storage products, but it's tweaks more than wholesale changes.
How can Dell EMC respond to the push that HPE/Nimble is making in the market?
Nimble has been very strong down-market. We just need to manage mix more than anything. In the midmarket, which historically has been Dell's power alley, they really have the transactional sales engine. What we need to add is storage selling expertise, because that wasn't the real strong suit for EMC prior to the merger, and storage was a relatively small part of Dell's business. Really what we need to do to counter the Nimbles is the same thing we need to do to grow our share in all-flash and counter Pure, and that's add storage capacity in that midmarket segment, and that would be both the sales reps and also supporting technical folks to assist the channel, as well.
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