Dell's Private: Now Comes The Hard Part

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The Specter Of Channel Conflict

Michael Dell has some big legacy issues to address to convert the channel masses to the Dell gospel. Talk to Dell partners and you hear a common refrain that the company is still, at its roots, a direct sales outfit.

CRN spoke with more than a dozen large and midsize Dell partners prior to the management shake-up. Each praised Dell products and services. But each also complained that Dell — more so than other OEMs that they do business with — makes it difficult and time - consuming to register deals. Sometimes, they claim, overzealous Dell direct sales reps outright steal deals away from them. "We've had several instances where we have had to fight Dell's direct sales for a deal registration," said Robby Wright, chief technical consultant and CTO at Abtech, a Carlsbad, Calif., Dell partner.

"Dell direct sales can be very aggressive. Sometimes we can spend hours squabbling [with Dell] over a deal registration. Multiply that by 10 deals a day and deal registration becomes a full-time job," Wright said.

Dell's company line is it is channel-neutral, meaning there is no financial incentive for Dell's direct sales team to exclude a channel partner from a deal.
Dell's sales representatives are compensated at the same rate whether a deal is done direct or with a partner, Davis said. This can be a conflict as some direct sales people feel more in control if they handle a deal themselves, and the compensation plan does not push them to work with the channel.

Dell rejects 29 percent of deals partners try to register, according to Davis. Dell does approximately 1,800 to 2,000 deal registrations a week, he said, adding that there are always going to be some deals that don't get approved.

Cook makes no apology for Dell's direct strategy, stating that the company is committed to giving businesses a choice in how they want to buy Dell products and services. "Dell has an 'omni' channel model which is unique to Dell. We are going to continue to support that," Cook said. That means keeping partners happy while promoting its direct and online business to customers.

"If you have a desktop and server relationship within an account and we want to expand it into other areas, we really want to work jointly with you," said
Frank Vitagliano, vice president of Dell's channel sales. "The idea is to develop a tight relationship with partners so we both know each other and can help each other reach mutual goals."

Complaints about Dell channel commitment taper off quickly the larger the partner. MCPc's Ayres said Michael Dell reaches out regularly to help his company, one of 22 solution providers in Dell's Large VAR program. MCPc's Dell sales are up 50 percent this year in no small part because of Dell's personal commitment to MCPc, Ayres said.

"Dell's channel program is simple, they listen to us [and] have one point of contact," he said.

NEXT: The PC Is Dead: Long Live The PC

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