To partner or not--solution providers have a lot of thinking to do
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Michael Dell has started a conversation with you. A conversation about a possibility that can only be converted into reality if you truly believe his words and see a future working with the vendor--whether the systems, storage or peripheral products Dell-branded but made by many of the companies you support today. That's my take on Dell's recent discussion with our sister publication, CRN. His words: "It's just a really important growth
opportunity for us to work with partners as we expand the ways that we're going to market. I think you will see a very different Dell in terms of the range of partnerships that we've created."
My reaction is twofold. First, if you really want to enroll channel partners, the conversation has to be about their growth, not yours. Second, we need to understand and see just how different Dell is going to be, because it's been down the channel road before and the results were none too pretty.
Either way, though, it's amazing that one of the most successful IT businessmen has retaken the helm of his company with a priority to engage with partners. This would've been unimaginable in Dell's salad days.
But if you're reading this now, you've heard the news and must be pondering a Dell strategy for your own organization. That means you'll either partner with Dell or you won't. If not, you'll have to craft an explanation for your customers as to why you won't be supporting Dell. Let's look at some of the strategic issues you'll have to look at in the coming weeks:
> Although Dell uses Tech Data and Ingram Micro, among others, to source systems and peripherals for its direct-sales efforts, it's leaning away from the two-tier model to supply products to VARs. That means you'd have to deal with Dell directly, and that's going to pose some credit issues based on how Dell finances such sales. For a distributor, the issue is even bigger: If a major supplier of Lenovo or Hewlett-Packard, for instance, all of a sudden added Dell, you can imagine the dustup that would ensue. So it's going to take a while for the sourcing issue to be resolved.
> Is the opportunity cost worth it? If you're selling little to no Dell gear today and want to make a deeper commitment, you'll have to invest time, resources and money in training your technical people and prepping your salesforce. Are there enough incremental sales for you to do so?
> What do you tell your customers? Buyers don't live in caves, and they've probably heard something about Dell's intentions to sell indirect. Information travels fast. So you need to answer two questions. First, if your customer wants to know whether you plan to support Dell based on the vendor's most recent plan, what's your answer? If your answer's yes, you'll have to explain why you said no for so long.
> Now here's a tricky question to answer. If you decide to start selling more of Dell's products, or to engage with Dell for the first time, what product line is going to suffer as a result? And how will that impact your relationship with a longtime vendor? The strategic analysis you'll have to do in advance for, say, notebook computers is this: Which brand will you sell less of if you start pushing Dell? Will you push fewer HP products? Fewer Toshiba or Lenovo systems? And if you do, and Dell decides to pull back a year from now, could you repair the damage that was done?
> What if you're a new-generation VAR--a 20-something up-and-comer--who's an IT consultant? You don't sell anything but your services. Yet you do encounter lots of opportunities to help customers decide on a new server or network printer. What's your call? If you bring Dell in the door, will its large services arm wind up pushing you aside?
I wish Michael Dell luck with his new channel plan. I hope he's sincere and plans to take the time to develop the trust of this great solution provider community.