Dell's Private: Now Comes The Hard Part

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The Road To Success Goes Through The Channel

Today, Michael Dell doesn't talk a lot about how he reinvented the supply chain and pioneered selling direct. Now, he preaches the channel instead. Dell's future, he said, is dependent on solution providers. "Because of the mix of products and solutions we have now, the indirect channel sale is more profitable than direct," he said. "Channel partners are selling more software, more storage, more network, and more servers."

New key Dell lieutenant Cook, a channel veteran who ran Sun Microsystems' partner program from 2006 to 2010, is responsible for growing Dell's PartnerDirect program and continuing the momentum started by her predecessor, Davis.

"From a strategic lens, we have to expand and grow our presence in certain markets and portfolios where Dell is under-represented. There are too many opportunities to take, and we need more partners to help us grow," Cook said in an interview with CRN. Last year, the number of Dell PartnerDirect members increased 38 percent, according to Davis. But for Dell, Cook said, it's not about partner head count. Success in the channel is about building relationships between Dell, partners and customers.

Cook's partner approach will differ from Davis', she said, by stepping up an emphasis on sales of end-to-end solutions that drive Dell software and services deeper into the enterprise. That approach, she said, is a switch from the earlier focus on transactions on Davis' watch.

Davis is widely credited for creating and pushing the Dell channel more deeply into the company's direct-sales culture. But now the channel, which was a separate silo from Dell's direct business, is rolled into one organization overseen by Marius Haas, Dell's chief commercial officer and president of enterprise solutions.

Two of Dell's biggest challenges going forward will be training partners to cross-sell and boosting the number of top-tier Preferred and Premier partners that now make up only a tiny fraction of Dell's global partners. To that end, Dell is on track to deliver 250,000 training courses in 2013 and just introduced four new training programs in its most lucrative business line, software, according to Davis.

Cook said channel program changes could come as early as 2014. "Over the next month or quarter, I'm going to get a lay of the land. I'm not going to fix things that are not broken. But where I see areas that need modification and where we identify unique challenges or see unique hypergrowth opportunities, yes, we are going to absolutely move fast."

One of those changes, she told CRN, will be to incent partners to sell Dell's full portfolio of products, pushing end-to-end solutions from the client to the server, including security and converged infrastructure. She also said Dell will be working hard to shore up its field engagement to reduce channel conflict and strengthen partner sales.

Jed Ayres, senior vice president of partner management and marketing at MCPc, a $262 million Cleveland-based national solution provider ranked No. 89 on
CRN's Solution Provider 500 list, said the channel is more important than ever to Dell now that it has gone private.

"Dell is just an amazing opportunity for us right now because of the ubiquity of their brand in many of the accounts we are in," he said. "We see the ability to go wider and deeper with Dell with the acquisitions they have made. How are they going to get a return on those investments without the channel? The channel is becoming a much more important part of their go-to-market strategy."

Ayres sees Dell World as the most important event of the year for his business. "We are sending a small army to Dell World, bigger than any other partner summit all year," he said. "We are sending 16 people to Dell World because of the potential for sales growth."

NEXT: The Specter Of Channel Conflict

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