Channel Chiefs: Our Biggest MDF Investments

As some vendors start to change the way they approach MDF, not all of them are doing it in the same way. At a roundtable held at 2015 XChange Solution Provider in Dallas earlier this month, vendor channel chiefs discussed where they are investing the most around MDF and other partner enablement tools, and where they are seeing the most return on their investment.

The roundtable featured Frank Vitagliano, Dell vice president, global partner strategy and programs; Frank Rauch, VMware vice president, Americas Partner Organization; Craig West, NetSuite vice president of channel sales; Mike Valentine, Sophos senior vice president, worldwide sales; and Richard Vaughn, Toshiba America Information Systems director of channel sales, business solutions division.

Following are excerpts of the roundtable discussion.

[Related: Channel Chiefs: We're Changing Our MDF Approach]

CRN: When you think of channel budgets, where are you seeing the greatest increase? Where are you seeing the greatest ROI?

Mike Valentine: Greatest ROI is from being extremely focused. Meaning, if you take a compliancy, or you take an industry … and a direct approach to something, it's immediate. You can track it. A deal's a deal. That's really easy. You can look at your retail number and cut it up. We like to be very specific with the overall plan. An example would be going out, taking PCI compliancy, and looking at a retail issue, and being specific to that, taking it out to the partners, and then tracking retail over retail. Just defining, and having them write a very detailed business plan and holding them to it. I think they appreciate the fact that before we give them the money, they need to know what they're going to do with it. Just picking the verticals, I think health care and retail have been the biggest for us specifically, though. Without question [it's where we're making the biggest investments.]

It is MDF, but MDF, it comes in one lump sum. How does that trickle down? People, training, products, it could be a whole host of things that we do, but it's the specific business proposal that comes to us. If we take that and just stay within one market space, and do that, it's trackable, and it grows. You're not afraid to [spend more]. You don't have to take as big a risk.

Craig West: I think for us the biggest [investments] when I look at budget overall are going to be enablement. That's probably going to be the first. We're not really incrementally investing in MDF, or co-op directly. [It's] enablement across all the areas. Then, head count.

It's just getting much, much, much closer to partners, and to be having those strategic relationships, those quarterly and annual business planning relationships with a much larger universe of our partners. Not just our strategic, or tier-one partners, but to get deeper and much closer to a wider universe of our partners.

Frank Vitagliano: Ours has been across the board. The thing you've got to remember here is, fortunately, we don't live in a world where we're the only one out there. A lot of it's reaction to competitive activity and everybody's trying to get each others' customers. But, in our case, one of the things that we discovered we weren't really doing that well is loaners, demos. It was just something that we just underbudgeted. We just totally underbudgeted it. So, we've spent a lot of money on that. The other thing we spent money on, and some of it was a competitive reaction, but we have a Partner Advantage program where we're actually providing spiffs, if you will, to the solution providers' sales reps.

The last piece for us that's really significant is funded heads. We spend a lot of money on putting what we call funded heads ... where you fund a Dell resource, add a solution provider. That's a very effective way of getting influence. Getting people to be thinking about you and those solution providers. Lastly, you have to customize programs.

Richard Vaughn: I think Frank said about most of the same things that we're investing in right now. We definitely saw that we need to have more demo equipment. People really see the differentiation in products when they get them in their hands. So we're looking at ways to provide more product into, not only end users' hands, which has always been something we've been very capable of doing, but more into the partner's hands.

We're making major investments in, just in our channel sales organization. We're in the process right now of doubling the sales organization. So that has its pains and long-term investments there, finding the right people that know the channel, and can help drive the channel forward. And then the MDF plans. We're putting more and more ... Toshiba-badged employees in our partner sites. Whether it be within distribution, or even at the partner levels.

Frank Rauch: A lot of what those guys said. We're spending a lot of money on enablement. You know, it's a brave new world for VMware -- software-defined, Software as a Service, Platform as a Service, Information as a Service, Infrastructure as a Service, etc. We need to be able to, if we're going to create new markets, we need to be able to enable people around the new markets.

Second area is spend by services. We need to be able to drive adoption, not just get the sale of the product. We need people that are willing to invest in services and we're putting in the curriculum, shadowing, everything we need to do to help them drive the market.

CRN: Are you happy with the results MDF produces for you today? Yes or no?

Valentine: We are. It's a business conversation about money and return on investment with the CFO. And then the theory lives with me and the channel. I'd always like more [return], but I think it's afforded with a more technical product in a specialized field. It's going to very productive things that are long term. You train somebody, you get an SE, it's not just a quarter a year -- that person's going to produce for a while.

Rauch: We're not. I mean, I love to be in a situation where I would say we're getting every dollar out that we could get out of the market. But, I think we're caught between legacy cost of doing business and what we really want to do in the market. You never want to just vacate what you've done, and what's been successful. But, you need to be able to migrate into new areas. I think that will hold us back a little bit. But, overall, I think we're in a good spot. But could we be doing better? Yes.

This article originally appeared as an exclusive on the CRN Tech News App for iOS and Windows 8.