Dell Partners: More Communication, Strong Stance On Channel Conflict Are Driving Sales

Dell Technologies executives are trumpeting a significant number: $43 billion. That's the annual revenue Chairman and CEO Michael Dell and other executives say is being generated by the IT behemoth's channel partners.

Chairman and CEO Michael Dell discussed the $43 billion channel business during a fireside chat with The Channel Company CEO Robert Faletra at the recent Best of Breed conference, noting that channel partners play a key role in Dell's bid for market share. Share gains are coming as solution providers respond to the company's call to sell multiple lines of business, he said in the interview, with 80 percent of Dell partners now selling both servers and storage, for example.

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"If we're No. 1 in servers and growing at 22 percent [through the channel], did the whole industry grow at 22 percent?" Dell said. "I don't think so. That means we're gaining share."

Dell partners told CRN that the increase in sales going through the channel is a reflection of Dell's commitment to and stepped-up communication with partners.

"They've been making great strides with their channel effort," said Michael Pearson, CEO of DSA Technologies, an Elk Grove, Calif., solution provider. "We certainly see engagement with many of the field reps, and anyone inside of Dell who is bucking that trend is easily spotted."

Dan Serpico, CEO of San Francisco-based FusionStorm, said the vendor has over the past year demonstrated a deepening commitment to the channel, as evidenced in efforts like Dell EMC partner program's "zero tolerance" policy for deal registration violations, as well as increases in rebates and MDF.

"[Channel chief] John Byrne and the whole executive team are showing an understanding of the financial and emotional commitment to what is now their largest sales force by volume," Serpico said, adding that communication between the company and its partners has improved greatly since it rolled its unified partner program last February.

"You see all the execs out there in roundtables, soliciting feedback, questioning how they can do things better," Serpico said. "There is a great deal of communication – conference calls with John [Byrne] and [North America Channel Chief] Gregg [Ambulos]. It feels more like a partnership than ever."

Paul Neyman, president of Houston-based Waypoint Solutions, said Dell leaders have taken a much stronger stance on channel conflict, including the "zero tolerance" policy, than they have in the past while also putting more resources into channel efforts.

"I've seen a stronger stance on restricting direct competition on channel-led deals," Neyman said. "If a customer is a designated channel customer, the direct teams have stronger penalties for violating that designation. We've also seen more resources for the channel in sales and sales engineering headcount. There's a much larger number of folks available to us to help with sales and pre-sales technical support."

Dell took steps in August to ease friction between partners and its VMware business when it introduced a new VMware enterprise licensing agreement strategy that allows top-level Dell EMC partners to procure VMware on Dell EMC paper while earning incentives from both companies' programs.