Dell Technologies warns of 'short-term disruption' as it integrates channel

Umbrella company for Dell, Dell EMC, VMware and others, reports Q3 results for the first time

Dell Technologies has warned there may be "some short-term disruption" as it integrates its go-to-market activities, as it reports its Q3 results for the first time.

Although Dell Technologies - the parent firm for Dell, Dell EMC, VMware, Virtusteam, RSA SecureWorks and Pivotal - is a private firm, some of the individual companies are public, meaning Dell Technologies is obliged to report some information.

For its third quarter, ending 28 October, net revenue at Dell Technologies was up 28 per cent year-on-year to $16.2bn (£12.84bn), on an operating loss which widened to $1.5bn, compared with $78m the year before.

Krista Macomber, senior analyst at Technology Business Research said the operating loss is a "significant threat considering the ongoing R&D and SG&A [selling, general and admin] funding required for Dell Technologies to sustain in order to fuel its ongoing evolution."

On an earnings call, transcribed by Seeking Alpha, CFO Tom Sweet warned there could be disruption ahead for its channel partners.

"We are on track with a broad set of integration activities, but there is more work to be done," he said. "We will consolidate our sales force and channel programs starting in FY18. We will continue to drive against the cost and revenue synergies we have identified and we will continue to provide great solution in services to our customers.

"Given the complexity of this integration, there may be some short-term disruption as we integrate our go-to-market activities. However, we are focused on minimising the impact to our customers. We have a talented team, a strategy we believe in and a portfolio of solutions that can help our customers address IT challenges now and into the future."

The Dell EMC Partner Programme - which was unveiled at Dell EMC World in October - will come into force in February next year. The tiers will be Gold (lowest tier), Platinum, Titanium and Titanium Black, but as yet, no details on the specific revenue thresholds and requirements have been announced, as Dell EMC works it out with the help of its partners.

In the meantime, the company has launched a number of initiatives it hopes will ensure the smooth running of the two channels prior to the merger in February.