Dell To Cut Partner Deal Reg Minimum

Based on solution provider feedback, Dell plans to lower the minimum amount required to register a deal to $50,000, from $75,000 in February as it continues to refine its nascent channel program.

Many solution providers have told Dell that $75,000 was too high, but the company felt a higher figure was necessary initially in order to make sure the program worked correctly, Davis said.

"[At $50,000], we feel confident that we can continue to deliver a quick turnaround to partners," said Greg Davis, vice president and general manager of the Dell Americas channel organization.

The move comes as Dell claims early success for its formalized partner program that launched last month. Thus far, Dell said it has registered 3,500 partners in the U.S., the bulk of which were already doing business with the vendor. Davis said, however, that about 170 of the partners were completely new to Dell. Those partners have registered more than $20 million in opportunities, he added.

About six months ago, Dell's direct sales force began using the same Salesforce.com tool to register deals, so the company has a time stamp on the registration to determine who had it first and provide evidence to partners if necessary, Davis said.

Dell approved about 70 percent of the deal registration applications submitted thus far, Davis said. Dell's direct sales force was already involved with the remaining 30 percent, he said.

"We fully expected partners to come to us with opportunities where we were already engaged. In those cases, we could not approve those deals, [but] I view the program as a great success. So far there has been no escalation, no issues, of us not living up to our commitment," Davis said.

In a handful of cases, Davis said Dell account executives decided that the customer would be better served working with a partner. Because Dell's reps are compensated the same for direct or channel business, the partner has taken the deal, Davis said.

Dell's channel program still has many solution providers polarized. Some simply can't envision ever working with a vendor that has competed so aggressively against them for years. Others are engaged with the company, but even many of those VARs are frustrated by a perceived lack of progress in the program, which will be expanded to include Canada and European VARs on Feb. 12.

Those VARs should get some relief Monday, when Dell plans to roll out an enterprise architecture certification path for U.S. partners. That news could coincide with a rumored announcement of a closing of the EqualLogic acquisition. Davis declined to comment further on any announcements for Monday.

Dell has had its hands full while trying to build out a program for solution providers while closing two acquisitions -- EqualLogic and SilverBack Technologies.

Next: Dell's Partner Program Takes Hold

Then there's the great belly of the Dell direct monster that must be fed daily by the millions of orders coming from the company's own internal sales engine. The channel, thus far, is but a mere morsel to whet the giant's appetite, but the potential for a greater meal has the company intrigued. And therein lies the rub. How do you keep the company going while trying to convince former competitors that you want them as friends? Dell is learning along the way.

"I think we recognize that it will take time to build out full relationships and full programs for channels. I don't know anyone who has built strong [channel] progams in weeks," Davis said. "We're dedicated to this. We continue to listen to partners at [our] field conferences, where no one is bashful to tell us where to focus our time and effort."

If not great strides, the company has taken small but measurable steps thus far.

One long-time exclusive Hewlett-Packard solution provider who requested anonymity said he is exploring a partnership with Dell because of the vendor's EqualLogic acquisition and Dell's existing relationship with EMC.

"HP has holes in its storage product lines and Dell has made big investments in storage," the HP partner said.

Few partners are now selling a complete Dell solution -- with hardware, storage and managed services -- but that's where the company wants to get, Davis said. Dell believes its value proposition to VARS -- judging by feedback from partners -- lies in custom configured products, lower costs and a broad array of solutions.

"Our value proposition is simplifying IT, [the solution provider's] work, to enable them to be a better CIO for their customer," Davis said. "It's a very similar message to the rest of our business. Delivering custom configured products form our factory, pre-loaded with software is a big opportunity for our partners. It eliminates costs and leverages what Dell has been doing direct for years. Deliver customer configs of Quantity 1 is what Dell is very good at. Partners interested in being the CIO for their customers are very interested in being partners with us."