Dell: Look For More Services, Certifications In 2009

Davis spoke recently with ChannelWeb about the anniversary of PartnerDirect and what lies ahead. The following are excerpts from the conversation.

Take us briefly through the first year of PartnerDirect. What were some of the highlights to you?

Prior to kicking off PartnerDirect, we had a global channel business that was about $9 billion on a yearly basis. Our channel business continues to be on track for $12 billion this year. We look at that as a significant milestone and an acceptance of our partner programs around the world.

We wanted to launch our program and stay focused on our certification paths. We decided about midway through the year to make sure our storage, our server and our enterprise architecture program was flawless and keeps doing a really good job recruiting partners before rolling out more certifications. I think you'll see more from certifications in the coming year.

We launched the deal registration program and we're now approving 70 percent of deals coming in from partners as partner-led opportunities with Dell. We launched with a $75,000 minimum and we pulled that down to $50,000. We're working hard to take that down even further.

What's exciting about deal registration is the volume. In the month of December [2007], we had less than 20 deals for the whole month. Last week we had 511, over 70 percent of them approved. That shows me there is great value in the program. Dell sees it as incremental opportunities that we are approving for our partners. We've gotten feedback on deal registration to streamline and improve it and based on partner feedback, we are looking at loading products easier for our partners. It can be a little complicated, given all the different products you can get from Dell. Once partners know how to navigate, they like it, but it's a bit of a ramp to get to that stage.

We continue to invest in partner portals and leverage those around the world. You'll see more of that. You'll see us invest in partner financing. We've done some things in the U.S. for working capital for our partners. We'll look for other areas where we can help partners grow their business. You'll see, in the coming quarter or so, more clarity around services, resellable services and how solution partners can work with Dell to resell services on our behalf.

During the summer, you announced that you were piloting an account registration program, for solution providers to register customers and not just individual opportunities. What's the latest with that?

We wanted to invest in and explore account registration. Based on our partner advisory council, we took 24 partners and we piloted some small and medium account registrations in different regions. We didn't have great success with it. It was challenging with respect to registering the accounts. There are some operating things we had to work out, but we're still trying to work out how to improve that process. Our focus is on net new accounts, accounts that have not done business with Dell in the last two years. Many competitors offer SPIFs and bounties to capture new business. That's relatively easy to do. We'd like to build a longer-term plan with partners on how [to] grow Dell's business with those accounts over time. There's a level of security and conflict management with those accounts. That's more challenging from an operational standpoint. We learned a lot from the handful of pilots, and we will continue to explore how we can do it in the SMB space.

You mentioned earlier that 70 percent of deal registration applications are approved. For the remaining 30 percent that are not approved, what can VARs do better?

In many cases, we are already working an opportunity through our direct team. We've already done quotes with a particular customer. Those applications come in and we quickly inform partners that a particular opportunity is already well engaged and we'd like to work with them in something else. In some of them, we're also already working closely with another partner. And we have to inform the second partner that we're already engaged.

Those are the two big reasons we deny a deal registration. We do have conflict and we do have situations where we communicate back to a partner and the partner wants to escalate it. He may say he had a multiyear relationship with the customer and he thinks he can do a better job. Then we will engage with our direct team again, share that information and try to make an intelligent decision on which way gives Dell the best opportunity to win. In many cases, we unregister the deal with our direct team and give it to the partner.

So it's not necessarily a case where the VAR did something wrong and needs to improve?

Clearly, the more information our partners give us, the better. Sometimes partners come in with limited information. We deny it because there's not enough information to make a decision. I would say those are a small minority. We are reviewing 500 opportunities a week and we turn them around on average in 36 hours. We can really only do that if we get good info from our partners.

You mentioned services earlier. Can you detail any new offerings you're planning for 2009?

I can't give you a lot of details now. We do take feedback from partners. We want to do a better job leveraging Dell services through partners where it's good for partners, good for customers [and] good for Dell. There are areas where we had great progress, but resellable services and the partner model around services is an area I would have liked to have made better progress in the year. We have a great deal of partners selling warranty services today, but it's a great area to improve. We're working closely with our global services team and as we launch more services, we'll have a partner model for those services.

You also mentioned credit earlier. That's an area we are planning to focus on in 2009 as the economy continues to struggle and VARs and their customers look to finance deals. What are you doing in that area?

Very early on, feedback from our customers was, "Help me with financing." We are working directly with partners. Partners come in and register. We qualify them, provide them with a line of credit and a set of terms. We offer extension of terms, up to 45 days for certified partners. We allow all our partners to provide Dell leasing to their end users. Any end user can stretch their payments with Dell Financial Services and leasing through a partner. Recently, we announced a unique working capital program around enterprise architecture products and certified partners. They have the opportunity to sell products and pay on an installment basis. That helps stretch them through some tough economic times.

Any last comments regarding PartnerDirect in 2009?

We continue to listen to our partners. We did an enterprise architecture partner survey. I just started reviewing that yesterday. We plan on improving deal registration and improving the online experience for ordering. That is something we will go and invest in. We continue to invest in our partners. We're committed to the future. We can't do everything everyone asks for, but we can take advantage of Web 2.0 tools, forums, to gather feedback to improve our relationships with partners. We recognize it's a long-term proposition with Dell. We are working to change the culture and the perception within Dell, and the perception within our partner community.