Dell EMC President: New Partner Program Will Leverage Dell's Economics, EMC's Engagement Model
Dell EMC President Marius Haas said the company's new partner program will draw inspiration from Dell's economic incentives and EMC's hard deck model for partner engagement.
The new partner program will take effect Feb. 1 and place tremendous emphasis on driving activity across multiple lines of business and providing solutions across all of the data center, Haas said Wednesday at Ingram Micro ONE.
"We have an unbelievable opportunity to take the best of both programs and now create one single industry best-in-class program," Haas, Dell EMC's president and chief commercial officer, told more than 2,000 people at the Aria Resort & Spa in Las Vegas.
While Dell EMC received positive feedback from partners about Dell's economics and the simplicity of EMC's hard deck program – which establishes a revenue threshold under which all deals must be done through the channel – Haas said partners indicated Dell's engagement model was unpredictable and that some of the economics around EMC's partner program had eroded over time.
Although specific details around the new partner program won't start being communicated until sometime in December, Haas said that simplicity, predictability and profitability will serve as the guiding principles. Dell and EMC have been maintaining separate partner programs since the blockbuster $58 billion acquisition closed in early September.
From a simplicity standpoint, Haas said the new program will ensure that partners understand exactly how they can quality for certain benefits at different tiers. The program will have four tiers, Haas said: Gold, Platinum, Titanium and the highest, Titanium Black.
"It has to be very clear," Haas said. "I want partners to know what it takes for them to make money."
As for predictability, Haas said he wants to ensure that accounts partners bring to Dell EMC are tagged to them in perpetuity. Dell EMC also wants to incent customers to grow wallet share for accounts they're bringing to the vendor, Haas said.
Focusing on profitability, Haas said Dell EMC is seeing significant consolidation, particularly in the client space, where just three vendors are boosting market share while the rest of the industry is declining.
"It's a competitive industry," Haas said. "With big parts of the market shrinking, the only way to grow is to take from someone else."
Some of the components of Dell EMC's new partner program will help A&A Computers, particularly as it relates to working more closely with Dell and leaning on Ingram Micro for educational opportunities, according to Marketing Manager Ashwin Doshi.
The Santa Clara, Calif.-based Ingram Micro partner primarily resells Dell desktops, laptops and servers, and Doshi said he's optimistic that the new partner program will make Dell even more competitive from a pricing standpoint.
Haas said Dell EMC plans to look holistically across its entire set of products and services and ensure that there's clear financial incentive for partners to increase the amount of business they're doing with the company. Dell EMC will be proscriptive with its sales force, Haas said, providing tremendous clarity around how they should approach different types of partner accounts and ensuring they're channel-led.
Dell EMC is already having conversations with Ingram Micro and other key vendor and distributor partners to ensure the company understands what matters to its channel partners and how it can best ensure their success, Haas said. The company is also working with publicly traded subsidiary VMware to ensure its programs are consistent and extremely attractive to partners, Haas said.
Dell has grown its partner ecosystem 30 percent to at least $35 billion since the company went private in October 2013, Haas said, giving Dell a market share in the channel of roughly 10 percent. Haas said he has told CEO Michael Dell that the company could achieve market share in the channel of 15 percent to 20 percent, meaning Dell could grow its partner ecosystem from $35 billion to $65 billion or $70 billion.
Dell has spent $12.5 billion on research and development since it went private, which Haas said is more than than what IBM and Hewlett Packard Enterprise have spent between them. Being privately owned has made it easier for Dell to focus on creating long-term value rather than having to optimize its performance for short-term, 90-day cycles, according to Haas.
"We don't have shareholders," Haas said. "We don't invest a dime in dividends. We don't invest a dime in share buybacks."