'Refuse To Lose': Dell EMC Primes Its Partners For A Storage Revolution

Dell EMC is waging an all-out assault on the storage market, investing $2 billion, hiring 1,200 new storage sales specialists, and initiating for the first time channel storage sales quotas aimed at driving big share gains in 2018 through partners.

Leading Dell EMC’s storage charge is a trio of tech veterans: Marius Haas, president and chief commercial officer for Dell EMC (pictured, far right); Joyce Mullen, the company’s recently minted global channel chief (pictured, center); and Scott Millard, an EMC veteran who is now vice president of global channels specialty sales at Dell EMC (pictured, far left).

Dell EMC is determined to stop storage share losses with a new aggressive ’refuse to lose’ sales strategy, Haas said.

[Related: Dell EMC Ups Its Storage Game]

’We are saying, ’Enough is enough,’’ said a fired-up Haas in an exclusive interview with CRN. ’It now needs to be real clear that we expect our team members and our partner ecosystem to really rally around the storage business. There are competitors out in the market and for some reason, in some cases, they have done better than we have. So we’re taking an approach around, ’Hey, we’re going to take a ’refuse to lose’ approach in the business.’

At the heart of the storage sales offensive are new robust storage compensation incentives for solution providers and the Dell EMC sales reps working side by side with those partners.

Hopkinton, Mass.-based Dell EMC plans to grow in the neighborhood of 5 percent to 10 percent above the market in its high-end and midrange storage business during fiscal year 2019, which begins in February, Haas said. The growth will ’no doubt’ come at the expense of competitors including NetApp and Hewlett Packard Enterprise, according to Haas. ’We clearly need to make sure that we have the right resources to go in the right depth, to have the right architecture conversations that also enable our partners to sell the full breadth of the portfolio into all markets aggressively, from the high end all the way down to the low end,’ he said.

Dell EMC has hired 1,200 new specialty sales personnel dedicated exclusively to storage, including data center partner managers and channel specialty sales executives focused on the partner-led selling motion around storage, converged infrastructure and data protection.

The company also has a parade of new storage products set to be rolled out in its new fiscal year. Those products stem from the massive $2 billion the company spent on storage-specific research and development in fiscal year 2018 in preparation for the storage charge.

Dell EMC is counting on channel partners, who account for about 70 percent of Dell’s midrange storage business, to drive the share gains. The company is incenting partners to attack the $14 billion midrange market in 2018 by implementing, for the first time, a storage-only quota for partners. In the past, Dell had a combined storage and server quota, but that’s no longer the case.

’We are getting real precise around the expectations of our sellers to say, ’Storage is critically important. You’re going to be driving it.’ We got a phenomenal storage team that came to us with the EMC acquisition. Now what we want to do is turn that into an engine that is just going to drive extremely hard,’ said Haas. ’We’re also going to create training programs, enablement programs, MDFs and back-end rebates commensurate with our ambition to clearly have an aggressive share gain plan next fiscal year.’

Dell EMC is counting on channel partners, who account for about 70 percent of Dell’s midrange storage business, to drive the share gains. The company is incenting partners to attack the $14 billion midrange market in 2018 by implementing, for the first time, a storage-only quota for partners. In the past, Dell had a combined storage and server quota, but that’s no longer the case.

’We are getting real precise around the expectations of our sellers to say, ’Storage is critically important. You’re going to be driving it.’ We got a phenomenal storage team that came to us with the EMC acquisition. Now what we want to do is turn that into an engine that is just going to drive extremely hard,’ said Haas. ’We’re also going to create training programs, enablement programs, MDFs and back-end rebates commensurate with our ambition to clearly have an aggressive share gain plan next fiscal year.

Michael Thomaschewski, CTO of hybrid infrastructure at Long View Systems, a Calgary, Alberta-based Dell EMC partner ranked No. 87 on the 2017 CRN Solution Provider 500 list, said the rejuvenated storage charge and new resources undoubtedly will boost Long View’s bottom line.

’Adding 1,200 employees is nothing to sneeze at. That’s an astronomical investment on [Dell Chairman and CEO] Michael Dell’s part and his organization,’ said Thomaschewski. ’The doubling down on this is really sending a message to the market: ’We are not going anywhere and storage is still something everybody needs, and we see a huge growth opportunity in it.’ That’s a key way of driving the market toward a particular direction that I think they’ll be successful at.’

Dell EMC began the storage offensive in earnest in November with new all-flash versions of its midrange SC Series, giving partners one SKU and all-inclusive software. The company also recently enhanced its Dell EMC Unity product line offering to include deduplication, cloud-tiering and online data-in-place upgrades.

’The product set is on fire,’ said Thomaschewski, adding that Long View’s Dell EMC storage sales were up nearly 10 percent in 2017 compared with 2016 with a large spike in all-flash sales including XtremIO and Unity.

In addition, Dell EMC recently added its 14G PowerEdge servers to its hyper-converged appliance, VxRail, along with specialty pricing for partners. Dell EMC is reducing the standard price for VxRail and Unity for partners by ’double digits’ with the goal of ’getting partners to a winning price faster,’ said Dell EMC’s Millard. ’It’s priced to win. We are looking to signicantly increase our volume and win rates in midrange with our partners,’ Millard said.

Dell EMC plans to accelerate the storage innovation march in 2018 with signicant new investments in next-generation ash technology for its SC Series and Unity product lines, said Sam Grocott, senior vice president of marketing, storage and data protection at Dell EMC.

One of the big bets for the new year will be in the form of game-changing machine-learning technology. ’We’ll have new technologies and products that double down on not only having better intelligence around the data, but being able to automate action around that information and be more effective, more secure and more efcient in how we provide value to our customers storing their data,’ said Grocott.

Dell EMC also is planning to continue to advance the integration of both SC Series and Unity into the cloud. ’Being able to natively tier into the cloud and being able to provide insight into your data that’s both on-premise and off-premise will be a big focus of ours as well as we move more to a hybrid cloud world,’ said Grocott.

Although Dell EMC’s server and client business has been on fire, the company’s worldwide enterprise storage business was flat year over year during the third quarter of 2017 with sales of $2.2 billion, according to research firm IDC. Dell’s external enterprise storage sales fell 4 percent during the third quarter to $1.6 billion. However, Dell EMC still holds a commanding leadership position in the global external storage market with 28.8 percent share, followed by NetApp at 12.5 percent, and Hewlett Packard Enterprise with 11.4 percent, according to IDC.

To combat the flat storage sales and turn up the heat on the the competition, Dell is doubling down on partner programs and incentives to drive channel profitability, aiming to displace its rivals.

The company’s new #GetModern program provides partners with the same assessment and proposal tools used by Dell EMC’s internal sales teams to facilitate data center sales. In the U.S., partner reps and sales engineers can earn up to $10,000 each for selling all-flash arrays or converged infrastructure, as well as 1.5 percent of the deal value if it includes a competitive swap of up to $30,000. Dell EMC also is paying $500 to partner reps and sales engineers for proposal and registration, and $1,000 for demand generation, even if the solution provider fails to close the deal.

Over the past few months, the program already has led to $750 million in the pipeline for the channel, according to Millard. ’We are really putting our money where our mouth is with regards to the key programs we’re driving with our partners,’ said Millard. ’These midrange announcements around new programs and products are just the beginning of a wave of announcements you’re going to see over the next six months.’

One partner reaping the benefits of the #GetModern program is Waltham, Mass.-based Winslow Technology Group.

The program’s tools and proposal templates have helped the solution provider generate a total of 105 new proposals around all-flash products like Dell EMC Unity, SC Series, Isilon and VxRail.

’That’s 105 customers getting proposals. It’s no coincidence that, as a company, we’ve already hit our storage target for the quarter after only six weeks. We are right now blowing out our storage number,’ said Scott Winslow, president of Winslow Technology Group. ’Our salespeople and our solutions architects are being incented nicely to put those proposals together, so now it gets the activity going. It’s a win for the customer because they get a nice package that they can sell internally, but then our salespeople get additional compensation for it. That’s extremely effective.’

Another program driving channel storage sales is Dell’s new Future-Proof Storage Loyalty Program, which includes a customer three-year, satisfaction guarantee; trade-in credits toward new Dell EMC storage products; a storage efficiency guarantee; all-inclusive software; and one year of built-in Virtustream Storage Cloud for new buyers of Dell EMC Unity storage products.

Millard said Dell built the Future-Proof Storage Loyalty Program to be the top storage partner program in the industry ’It doesn’t cost anything extra for a partner. So there’s no additional cost and if you look at competitors’ programs, their return policy is typically 30 days—ours is three years,’ he said. ’So right out of the gate you can see the uniqueness of the program.’

Dan Serpico, CEO of San Francisco-based FusionStorm, ranked No. 46 on the 2017 CRN Solution Provider 500 list and one of the ultra-exclusive Dell EMC Titanium Black partners, said he is seeing ’considerable pressure’ in the storage market. Although his Dell EMC server, networking and client sales were all up in 2017 year over year, storage sales were generally flat.

Market trends like direct-attached storage and softwaredefined technologies are having an impact on FusionStorm’s ability to continue to scale at the same pace as it could in the past. Pressure is also coming from Dell EMC storage competitors like Pure Storage and NetApp, he said. Although market pressure is mounting, Serpico is ’bullish’ about Dell EMC’s strategy and ability to recognize and solve storage challenges in 2018.

’Dell clearly has recognized that the market is challenged and they’re putting significant resources in attacking that market. Some of that is in the form of incentives, which we think are very important and have value, and some of that is their investment into the market itself and working in partnership with us in the field,’ said Serpico. ’The market is challenged, there’s no doubt about that, but Dell’s got the right approach. They’re investing heavily in it. Attacking it. They want their disproportionate share. That’s certainly encouraging to us.’

Tasked with driving partner enablement and profitability is Mullen, who replaced the hard-charging channel advocate John Byrne. Byrne is now Dell’s North America commercial sales leader.

Mullen, an 18-year Dell veteran who previously led Dell’s OEM and IoT business and added the global channel chief role at the end of November, said a big focus area in fiscal year 2019 will be on storage enablement and training for channel partners.

’We want our partners to be every bit as smart as our smartest storage specialist around our capabilities and our offerings,’ said Mullen. ’Just like our storage specialists are extraordinarily well-versed in matching up the right kinds of solutions with the problem the customers are trying to solve, we want to make sure our partners do the same. Making sure our partners are completely enabled is critically important for us.’

The storage blitz comes on the heels of the completion of the integration of the Dell and EMC teams. Dell Technologies became the world’s largest privately held IT firm after completing its $67 billion acquisition of EMC in September 2016. The integration process was moving full-throttle throughout 2017, said Michael Dell.

When asked to name his biggest accomplishment of fiscal year 2018, Dell said it was the completion of the complex integration process with EMC.

’We completed one of the largest and most complex integrations in history, and the company is functioning right now as one company. We have one face to the customer and we didn’t break anything. A lot of stuff that could have gone wrong didn’t go wrong,’ said Dell in a recent interview with CRN. ’We’re off to the races. I would say it is kind of like the end of the combination and integration, and it’s the beginning of the beginning. So we are just starting our new year as a relatively newly formed company with a lot of the integration behind us and great momentum from our customers and partners.’

Solution providers say their overall Dell EMC sales exploded in the second half of 2017 with the complex integration of the merger complete.

’We just had a record third quarter and are now surpassing that in our fourth quarter,’ said Winslow Technology Group’s Winslow. ’The Dell-EMC integration has taken hold and become more mature. The second half of 2017 has been incredible for us. Now that the eld sales teams have become more stabilized and have a better handle on how they’re going to go to market in the field aligning the legacy Dell and EMC teams, we’re very bullish that growth will continue in 2018.’

Winslow Technology Group’s Dell EMC storage sales were up 10 percent to 15 percent in 2017 compared with the previous year with plans to ’hire aggressively’ this year to support Dell EMC’s storage charge.

Michael Dell said his company is still focused on gaining market share in the server industry, but it is now expanding its efforts around storage.

’We’re adding resources in terms of storage specialists, increasingly creating more and more appliances with converged and hyper-converged, and helping our customers realize the hybrid cloud opportunity,’ he said.

Storage success in fiscal year 2019 will be measured by Net Promoter Scores from customers, partners, employee team members, as well as market-share gains and nancial performance like EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) and cash flow, according to Michael Dell.

On top of all the storage-focused programs, incentives and new products rolling out to help the channel drive sales, Dell EMC is urging partners to leverage the company’s massive portfolio to win new deals. Dell EMC executives said the breadth and depth of the portfolio is a clear market differentiator that partners should utilize to their advantage.

Robert Keblusek, CTO of Sentinel Technologies, a Downers Grove, Ill.-based solution provider ranked No. 117 on the 2017 CRN Solution Provider 500 list, said customers are now asking what more can they leverage inside the Dell Technologies portfolio unlike ever before.

’In some cases, they might have never had EMC or had EMC before and went in another direction, but now they’re relooking at it and saying, ’Hey, it’s now part of the overall Dell. Can Dell really meet a lot more of my needs?’ I just met with a university that was in a very similar situation,’ said Keblusek. ’They see the broader portfolio now with EMC giving them a lot of depth as far as storage, hyperconverged and data protection go, which gives us an opportunity to go in and solve more problems for customers than we previously could.’

With a healthy balance sheet of $18 billion in cash and investments heading into the new year, Michael Dell said he’s ’very optimistic’ and feels that there’s ’nothing but great opportunities ahead.’

’When you compare us to the other large companies in our sector, what you find is we are larger, more profitable and growing faster,’ said Dell. ’It’s a good combination.’