Dell Puts 200,000 Direct Accounts Into The Hands Of The Channel

In one of the most sweeping changes to its seven-year-old partner program, Dell said Wednesday that it is rolling out lucrative incentives for Dell Direct sales reps to work hand in hand with channel partners. Dell said part of the push includes moving about 200,000 existing Dell Direct accounts to channel partners and creating a 20 percent "compensation accelerator" for its direct sales team to generate new enterprise business with Dell channel partners.

"In terms of driving sales engagement between Dell Direct and our partner community, this is by far the most significant set of activities that we have ever done to drive a cultural transformation as a company and change our channel's go-to-market strategy," said Bob Skelley, executive director of Dell's Global Certified Partner Program, in an exclusive interview with CRN.

The Round Rock, Texas-based company unveiled the channel changes at Dell World, which runs Dec. 11 to 13 in Austin, Texas, and they will go into effect Feb. 1. The moves come at a pivotal time for Dell, which just completed its $24.9 billion private equity buyout and weeks ago underwent a major internal shakeup that puts both direct and indirect sales under one organization overseen by Bill Rodrigues, Dell's newly appointed vice president of global channels and alliances.

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Dell also said it will quadruple the money spent on its Dell PartnerAdvantage sales incentive program, significantly boosting rewards and points used to motivate partners. Part of Dell's push includes making a five-fold increase in new investments in the number of demo units, seed equipment and lab hardware available to partners.

Frank Vitagliano, vice president of North America global commercial channels, select sales channels, told CRN the moves will help Dell push its channel sales needle from just 33 percent of its global commercial business to a number that could almost double to as much as 60 percent as Dell moves to grow its enterprise sales footprint.

"Dell wants to significantly increase the share of wallet with our partners and foster deeper strategic relationships between Dell Direct and partners. These changes create crystal-clear rules of engagement for the channel that are consistent and predictable," Vitagliano said.

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Vitagliano said Dell hopes to significantly step up the engagement with its 1,500 North American Dell Premier and Preferred partners and work hand in hand to grow business, with more consistent account mapping and management. The new account strategies, he said, are aimed at getting partners and sales reps to work together and sell more of Dell's enterprise product line.

"Over the past six years we have built a well-oiled channel program. We have a really robust partner ecosystem put in place. That channel program is doing about a third of our business. We have a ton of capacity there. We have the ability to significantly grow utilizing channel partners," Vitagliano said.

Part of growing the channel will be moving those 200,000 Dell Direct accounts into a shared partner model with partners. The strategy is to push direct and indirect sales reps to work closely together to target underserved accounts that Dell Direct just doesn't have the resources to manage, according to the company. The "20 percent compensation accelerator" for direct sales reps is for new storage, networking, software, security and Wyse workstation business they create with Dell channel partners.

"Our message to the channel is go engage our sales team now. They are excited and enthusiastic to work with you. They are going to be more motivated to work with channel partners than ever before. This is an opportunity to go broker introductions and build relationships with those sales teams and figure out what your go-to-market strategy is together," Skelley said.

Skelley said the efforts are part of Dell's acknowledgment that it has work to do reverse the perception by some that it's not 100 percent committed to the channel. The changes are meant to shore up its field engagement to reduce channel conflict and strengthen partner sales, he added.

Vitagliano said the moves are a direct result of partner feedback and recommendations from Dell's 23-partner-driven advisory council. Longtime channel proponent Marius Haas, Dell chief commercial officer and president of Enterprise Solutions, ultimately signed off on the channel realignment, he said, and the execution of the strategy falls on his shoulders as well as those of of newly named channel chief Cheryl Cook and Skelley.

PUBLISHED DEC. 11, 2013