Partners Hail Dell's Channel Revamp, Declare It A Game Changer

Channel partners are calling the sweeping changes Dell made Wednesday to its channel program a game changer for their businesses that will add up to significant new sales in 2014.

At its Dell World conference taking place this week in Austin, Texas, the company announced a major overhaul of its channel program that heavily incents Dell Direct sales to work hand in hand with channel partners in an effort to accelerate sales of data center solutions and drive new business.

"We have been waiting for years for this. We now have very clear go-to-market rules of engagement with Dell Direct," said Jed Ayres, the senior vice president of partner management and marketing for MCPc, a $262 million Cleveland-based national solution provider. "With the new incentives for direct and channel sales reps to work together, we see this as a huge win for our bottom line. It's like throwing gasoline on the fire for our Dell business."

[Related: Dell Puts 200,000 Direct Accounts Into The Hands Of The Channel ]

Starting Feb. 1, when the Round Rock, Texas-based company said the new incentives kick in, Dell will move roughly 200,000 previous Dell Direct accounts into the channel where they will be managed jointly with channel partners and Direct reps. Part of those incentives include a 20 percent "compensation accelerator" for its direct sales team to generate new enterprise business with Dell channel partners. Dell also announced it would quadruple investments in demo and field equipment, as well as in its partner bonus programs.

"Now it's not lip service, this is real and will make a big difference for partners," said Bruce Freshwater, CEO of Sierra w/o Wires, a Pittsburgh-based Dell partner. "There is little doubt that the compensation that Dell is creating for its direct team will translate into new sales for partners like me," he said.

Freshwater, like some other Dell partners, have long complained that Dell's channel-friendly rhetoric hasn't completely matched what actually takes place on the ground. "At the end of the day, [Dell CEO] Michael Dell can't just repeat he's channel friendly. But with these changes, Dell has signaled to me it's ready to walk the walk."

Dell's channel program changes come weeks after the company underwent a major internal shakeup that put both direct and indirect sales under one organization overseen by Bill Rodrigues, Dell's newly appointed vice president of global channels and alliances.

NEXT: Partners Look To Double Business In 2014

Frank Vitagliano, vice president of North America global commercial channels, select sales channels, told CRN the moves will help Dell push its channel sales deeper and wider into the enterprise and are designed to drive sales of new storage, networking, software, security and Wyse workstation business.

"This is more than a win for our business, this is a grand slam for partners," said Patrick Mulvee, vice president of sales and marketing at Sidepath, an Irvine, Calif.-based solution provider and Dell storage partner. "For partners like us that have the right engineers that can get up and running fast with Dell Direct sales reps, it will more than double our Dell business in 2014," he said.

Michael Tanenhaus, principal at Mavenspire, an Annapolis, Md.-based solution provider and Dell partner, likewise said he sees the changes as an opportunity for partners like Mavenspire to double their Dell business. "This is a great new opportunity for those companies that have cracked the code of working with Dell Direct. For us, it could easily double our Dell business for 2014. But for some companies that are still trying to crack the code, this news doesn't change that dynamic."

For its part, Dell acknowledges that for smaller partners that rely heavily on volume sales of commodity Dell hardware, the new incentives will have less positive impact. Incentives are designed for more sophisticated interaction between Dell direct and partner reps such as account mapping and building out a company's data center.

Partners might also have to be patient as Dell works out how exactly it will dole out the 200,000 Dell Direct accounts to channel partners. But for Dell, a $60 billion company that officially went private only a little over a month ago and declared itself "the world's biggest startup," change is moving at lightning speed.

PUBLISHED DEC. 11, 2013