Dell Channel DNA

Greg Davis, Dell’s Global Channel Chief, is visiting Europe this week and visiting with his newest team members. In the latest article from CRN UK, Josh Clamen talks about the transition, new team members and the next phase for the PartnerDirect program.

As a co-founder of EqualLogic, Paula Long has a good perspective on the last year’s acquisition by Dell. Read more about her thoughts and vantage point over on the Inside IT blog at http://en.community.dell.com/blogs/insideit/archive/2009/01/26/dell-and-equallogic-one-year-in.aspx

(Posted on behalf of Greg Davis)

As many of you have recently read in the media, Dell is organizing itself globally around four major customer segments—large enterprise, public, small and medium business and consumer (already operating globally).

These business groups all have a simple charter: to get closer to customers and partners, simplify and make it easier to do business with Dell and deliver superior, differentiated value.

Many of you have asked questions about what Dell’s reorganization means for our channel business. I want to reinforce that our partners are key to Dell’s success in all our segments, both here in the U.S. and globally. When we launched PartnerDirect last year, we were responding to customers’ demand for choice and expanding the way we go to market. In the past year, 36,000 registered partners have signed on with PartnerDirect in 148 countries. The PartnerDirect portal is available in 19 languages. Dell’s revenue from solution providers has grown from to $12 billion worldwide. PartnerDirect has won various awards and recognition. All these are significant proof points that underscore Dell’s commitment to our partners, and that you remain an important part of Dell’s go-to-market strategy.

To further underscore the importance of the channel to Dell’s success, I will assume a global role in running our channel business. We will have further details on the globalization of PartnerDirect in the coming weeks.

While our channel partners will not be directly affected by the restructuring, the efficiencies and synergies that result from this should positively influence our channel business and better position it to serve partners and your customers.

In our first year of PartnerDirect, we worked hard to build our channel business and earn your trust. Together, we’ve laid a solid foundation for partners that we will expand and build on in the coming year. If you have any questions or concerns, please email me directly at Gregory_davis@dell.com. Best wishes for 2009! Greg

The four questions most channel vendors won’t want to answer.

In this challenging economy, we hear every day that it is harder than ever to be a channel partner. Most channel programs are complex, inflexible, hard to manage and difficult to track, pricing and deal conflicts are frequent, margins are shrinking and operating expenses are increasing. So you have to ask, what has your channel vendor done to help you deliver a lot more to your customers and still make more profit, in spite of a challenging economy? Here are four difficult questions that most vendors won’t answer:

How do I know you aren’t competing with me?

To answer this question, you need to look at a channel vendor’s actions, rather than what they say. Is your channel vendor buying services companies and giving a select few sweetheart deals giving, like 500,000 sales leads and funding 100 sales people, which compete against you? Do you have to use their services, or only use your own services, or do you have a choice of delivering the services you want and selling through the ones you don’t at a profit? Can you register deals so they are yours alone, protected from your vendor’s direct sales efforts and other channel partners?

What are you doing to make your program easier to administer, so I can use less resources?

One channel vendor just “simplified” their channel program and promotions from 140 down to only 40 (even 40 sounds like a lot). Still, many channel partners tell us that they have to hire and maintain dedicated staff just to work with a channel vendor, since the programs and compensation schemes are so complex. They tell us of multiple points of contact, complex administration rules, and having to work across multiple lines of business. Shouldn’t there be fewer moving parts in a program designed to avoid channel conflict, so the costs of administering a program are lowered? Shouldn’t there be a dedicated channel organization at the vendor, a single point of contact and online administration, so you can focus more on your customers and less on managing the details of a program? (There is a great blog post from Doug Ford, from The I.T. Pros, and a quote from John A. Sheaffer, CEO, Sysix solutions, Inc.: “Compared to other channel programs Dell PartnerDirect is a fresh, innovative, and doesn’t have a 30-year lineage of bureaucracy.”)

What are you doing to make your technology easier to get, deploy, and manage?

Face, it, IT is really complex, both for you and your customers. So how many companies are simplifying IT to ensure that each piece of technology you deliver is designed to reduce the costs of deployment, support and management? (Hint: There is only one.) Simplifying IT can help you lower your internal costs of delivering technology to your customers, so you can pass some savings on and still be more profitable. Shouldn’t your servers, clients, and storage be greener, use less power, and offer demonstrably better price/performance advantage than what is out there? Can you get a fully-functioning SAN straight from the box in under an hour?

What can you do to reduce my costs of customizing and shipping?

Many channel vendors ask you to order a ‘plain vanilla’ product from the warehouse so you can customize, and sometimes assemble, on site. Shouldn’t you be able to order systems right from the factory pre-customized, with images, software & components already loaded? And why take the extra step to ship to your site? Why not “factorize” deployments to save money by aggregating shipments, pre-installing standard & custom software loads, shrink wrapping, labeling, asset tagging, stickering, applying custom skins, laser etching, including custom pack slips, and even allowing for custom boxes (so the shipment comes from you, not the vendor)?

Only Dell PartnerDirect offers a dramatically different kind of channel program because it was built from the start to significantly reduce costs and increase channel partner sales and profitability. With Dell PartnerDirect, we work hard to avoid conflict, not create it. No program is perfect, but Dell certainly is working harder to take a different approach. If you disagree, let me know.

For a little something different, this blog gets you inside the head of a long-time Dell Direct Veteran, Sean Phelan, Director of Storage Sales, and shares the story on why he chose to join Greg Davis’s Americas Channels Group (ACG) in February of this year.

Starting from the Ground Floor

I started my career at Dell by selling the things that were considered too hard to sell by everyone else (servers, storage, services, etc.) But as I worked my way up, I also put myself in the right positions to take advantage of Dell’s strategic growth areas. My willingness to learn new things and take risks in strategic areas allowed me to become an executive at Dell within 10 years.

As I watched Michael Dell return to the company and state that “direct was not a religion,” I knew a seismic shift was about to occur and that it was time for me to pay attention. Dell had a basic fulfillment business for VARs that simply wanted to procure Dell hardware, but we now needed to build a program to match those of our competitors. Michael tasked Greg Davis with figuring out how to bring a channel strategy to Dell, and I watched with keen interest as Greg set the wheels in motion for establishing:

· Partner protection via deal registration

· New team alignments so we could better serve partners

· New processes for making it easier to do business with Dell as a partner

When Dell announced the acquisition of EqualLogic (EQL), I asked to be assigned to the integration team. I helped coordinate the merging of the Dell and EQL sales teams, which was key to integrating their channel program. It was a great experience. As I learned more about the EQL products and associated teams, I grew even more excited about our possibilities for the future.

Joining the Channel Organization

In my 10-year career at Dell, I had never seriously considered joining the channel organization because it had not been strategic or resourced like the direct businesses. However, the combination of Michael Dell telling us it was OK to do business with partners for mutual profit, the purchase of EQL and the launch of a strong channel program, this seemed like the perfect time to explore the new opportunities in the Americas Channels Group.

As luck would have it, one of the sales leaders from EQL decided not to stay on, so I jumped at the chance to ask for the role. My enterprise experience and leadership on the sales integration team helped me secure the position.

My first six months with the Channel group were spent getting to know the people from EQL, who turned out to be one of the finest storage sales organizations on the planet. My team focused on helping partners to create storage opportunities and close them. Almost every week, I travelled to meet with partners large and small — to get their feedback and learn about their concerns and needs. We calmed the fears of many EQL partners, who were nervous about losing their profitability and the ownership of their accounts.

Throughout this process, I realized something very interesting: Both the channel partners and the direct sales force viewed each other with the same amount of distrust. I worked to bring these teams together and realized that through open communication, each group could quickly find ways to do good accretive business together. The first 5 months in the role flew by as we worked to integrate systems, extend our #1 iSCSI share position with EQL and empower our partners to increase sales.

Evangelizing for the Channel Team

About the end of fiscal Q2, I asked my Channel management team what I could do better for them and for our partners. The answer was clear and unanimous: Go evangelize with the direct team the same way I had done for the last 6 months with partners. They wanted me to help the direct team overcome any doubts about the quality of partners or the integrity that the majority of partners bring to the table.

We developed a one page slide that could be shared with the different direct teams at Dell. We decided to focus on the Enterprise Architecture (EA) partners, who partners had met their revenue thresholds, purchased demo units and invested the time to get their teams up to speed on the Dell Enterprise products. Our goal was to:

· Promote the numerous reasons to work with EA partners

· Identify the easy ways to get started talking with partners and building relationships together

· Encourage the regional teams to meet their local EA partners, so they could begin to do the profitable business together that reduces customer complexity and solves business issues

Moving Onward and Upward

So far, the response has been great. The Dell direct Account Executives and Regional Sales managers that get it and want to grow their business faster are having success. So are the partners that are jumping in with both feet. It’s great to see. There are folks on both sides that are taking it slower and I’m also seeing them build the relationships that will lead to sustained business over time. Finally there are partners and some direct folks that will just need more time. Luckily it seems like every week, there are fewer and fewer of these holdouts.

Moving forward, I am going to keep evangelizing to both partners and direct teams. This is the most exciting thing I have ever been involved with at Dell and we are in the process of transforming the company. To those partners that are in early: THANK YOU!!! I appreciate your feedback and help throughout this process. For those just getting started, let us know how we can improve things for you. Finally for any holdouts, reach out to me or anyone on my team. We will do our best to help you have a great experience with our program.

Thanks for the commitment and here’s to a great next 6 months.