Dell-EqualLogic: One Year Together In The Channel

This week marks the one-year anniversary of Dell's acquisition of the storage vendor EqualLogic. At the time channel partners were concerned if Dell -- whose history with the channel had been questionable at best -- would affect their relationship with the storage vendor. Now, with a year of working with Dell in the rearview mirror, channel partners are able to gauge whether or not Dell has become a company with a real channel strategy.

But Dell must be doing something right, as it has seen its enterprise architecture channel grow over the past year. At the time of the acquisition, EqualLogic had 185 preferred partners and about 480 total partners in North America. One year later, the preferred partners, now called Dell certified partners, numbers over 400, with more than 930 total partners.

Dell, as a whole, has more than 35,000 partners in 148 countries worldwide, with 16,000 in just North America.

At the time the acquisition of EqualLogic was confirmed, channel partners like Pete Kennedy, chairman for Kraft and Kennedy, were wondering exactly how their business with EqualLogic would be affected.

"My initial reaction was kind of a mixed bag," said Kennedy. "I wondered what does this mean and what's the impact going to be on me?"

Meanwhile, some EqualLogic partners were less inclined to be optimistic about the purchase, said Ron Dupler, CEO of GreenPages Technology Solutions.

"We were one of the early dissenters," said Dupler. "We were cautious because we'd been a strong EqualLogic partner at the time the transaction was planned to take place."

In fact, some resellers whispered that the purchase of EqualLogic would act as a sort of de facto channel program that Dell could simply tap into to swell its reseller numbers while using it as a framework for its own partner program.

"From the technical side, EqualLogic's product mapped well to Dell's strategy of simplifying IT and to be more strategic," said Dupler. "What I was told early on was that EqualLogic's strong channel program was a key driver for Dell."

Dell added to that perception announcing its partner program just one month later, though the company stated the program had been in the works for quite some time.

But importantly, Kennedy notes, Dell retained key people from EqualLogic to be part of the burgeoning channel program to bring channel expertise to the operation.

"Dell was astute enough to keep on key EqualLogic people that had developed a successful channel program and then added to it," said Kennedy. "Once Greg Davis [Dell's global channel chief] started his group, that's when some longtime Dell employees got the religion of the reseller channel."

One astute move was to keep then-global vice president of channel for EqualLogic Bob Skelley on board to help ease the transition. Skelley, now director of enterprise architecture at Dell, knew there would be some hesitation by EqualLogic partners over the purchase, but saw an opportunity to expand the EqualLogic product line while working with Dell to build out its channel program.

Dell, Skelley admits, wasn't a channel-centric organization in the same as EqualLogic. But after speaking with Davis and Michael Dell, Skelley believed he saw a commitment to the channel.

"At the time, Dell wasn't thought of as a channel company," said Skelley. "I have the opportunity to help Dell mold and craft a great organization. Greg [Davis] gave me the opportunity to build enterprise architecture in its entirety as a viable way to accelerate what we were trying to accomplish."

Once on board, Skelley and Davis put in place an aggressive strategy to retain partners by dropping the minimum on deal registration requirements to $50,000 from $75,000, grandfathering in existing EqualLogic partners.

"Grandfathering EqualLogic partners into Dell's channel was the right thing to do," said Skelley. "It took a one-hour phone call. We wanted to reward partners for their investment and not take anything away from them. It showed that the commitment and attitude around embracing the channel here wasn't just corporate speak."

Next: Reaching Out To Partners

For Kennedy, who was grandfathered into the Dell program, the transition was seamless.

"One day after the acquisition, I got a phone call from Bob Skelley and he said, 'you're in the program.' And I said 'fine,'" Kennedy said.

But for Dupler and GreenPages Technology, the transition from EqualLogic partner to Dell partner was more involved. Because of Dupler's initial hesitation, Dell went on a 12-month-campaign to show Dupler that the computer manufacturer was committed to building a viable channel and looking to polish its somewhat blemished past.

"For the prior 12 months, Dell had been proactive with us, telling us how they were going to be a better channel partner," said Dupler. "Dell was very eager to make this work. And in the end, we didn't have as allergic a reaction as some other partners did."

In addition to making the move from EqualLogic's channel to Dell's as easy as possible for partners, Dell has taken an active interest in listening to reseller feedback over the past year. One promise that was made by the computer manufacturer at the time of the acquisition was to form an advisory council where partners would be able to provide feedback to the company.

That advisory council, according to Kennedy who is a member, has been a success. In addition to meeting twice a year in person, Dell also holds conference calls roughly every month in order to keep a finger on the pulse of their reseller community. Kennedy characterizes the advisory council meetings as unusual for a company as large as Dell.

"One of the key things about this meeting is how Dell approached it," said Kennedy. "Unlike a lot of vendors that come in and say, 'We understand the problem, here's the answer,' Dell listened. They came at us and admitted that they didn't know everything, and said, 'Here's what we're thinking as a company, what do you think?'"

Although eventually Dell won Dupler over, he noted the large cultural change that would have to take place at Dell in order for its channel to really work. Because Dell was historically more of a direct sales organization, Dupler expected there to be some bumps along the road where channel and direct sales met.

Ultimately, however, Dell handled things well enough to make Dupler a satisfied partner.

"I was impressed with how Dell approached and integrated EqualLogic in the organization, in terms of the channel and pricing organizations," said Dupler. "In terms of execution, in the first quarter, there were some of the anticipated bumps where we had to communicate closely and some community hurdles, mostly through channel conflicts."

Another philosophical change that Skelley has brought to Dell's channel program involves the investment required on the part of channel partners for training. Skelley helped lead the charge to bring more training resources to bear for partners, giving them what they wanted in terms of online and instructor-led training programs -- all while creating a collegial atmosphere where partners don't have to pay for their training.

"Dell paid for an engineer to come down and be on site," Kennedy added. "I can't tell you how valuable that is. If I fly to, say, the Bay Area and spend five days out of the office, I'm losing money. But then to be charged $4,000 for the event? It shows that a company doesn't understand."

But like any business transaction, time provides the best perspective. And in the case of Dell's acquisition of EqualLogic, both the computer manufacturer and its partners realize that it's still a work in progress.

Skelley acknowledges that there is still some work to be done between Dell's direct sales force and its channel partners.

"As much as I think we're going in the right direction on the channel side, there's work to be done," said Skelley. "There's still a lot of work to be done in bridging and brokering relationships between channel and direct sales."

But when it came to channel conflict, Dell has put in place a structure that helps resolve those issues relatively painlessly.

"When challenges popped up through the integration with direct sales, Dell got involved as needed and ultimately did the right thing," said Dupler.

Kennedy has seen improvement in the way Dell works with the channel since the EqualLogic purchase, noting specifically that the relationship between Dell direct and his company are "improving."

"The good news and bad news is that you can't take anything for granted," said Kennedy. "We're working on developing and maintaining those relationships with the company, which is true for any organization."