Dell To Pump $125 Million Into Channel, Says Partners Now Drive 40 Percent Of Global Revenue

A year after winning its $24.9 billion hard-fought battle to go private, Dell is on the attack and said it's set to take on an IT industry in upheaval, delivering "reliable and predictable" end-to-end IT solutions in contrast to uncertainty at rivals including Hewlett-Packard and IBM.

Cheryl Cook, vice president of global channel alliances at Dell, Tuesday pledged $125 million in partner incentives for 2015 as part of Dell's plan to turn up the heat on its competitors and grow Dell's storage, data center and PC business over the next year.

Cook's pledge came as part of the Dell World 2014 kickoff. Dell partners are now the front line of Dell's growth, Cook said, representing 40 percent of Dell's overall global revenue -- up from the 33 percent it cited this summer. Dell's channel business, she said, is outpacing Dell's direct business.

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"There is a lot of uncertainty in the industry right now," Cook said. "HP is embarking on a complicated transformation, as is IBM and Lenovo. Dell absolutely will continue to be very focused and stable, continuing to drive end-to-end solutions."

Also at Dell World, which runs Tuesday through Thursday in Austin, Texas, Cook said Dell is priming the business partner pump with generous channel incentives specifically aimed at driving new storage business. Incentives, Cook said, will be up to $800, depending on the size and complexity of the storage array.

Over the next year, Cook said partners can expect new and more lucrative incentives centered on end-of-life Windows Server 2003 server migrations ahead of the June 2015 deadline. Cook said Dell is also putting its money where its mouth is when it comes to driving new client PC sales in the enterprise with new inducements. It also will double its investment in partner demo equipment and lead generation.

On the financing front, Dell said it will enhance the extended terms of its financing program, offering 75 days interest-free financing on all Dell purchases for an introductory period of 180 days.

NEXT: How Do Dell Partners Feel About Past Year?

"Dell is absolutely more strategic with me over the past year, helping us drive our Dell business nearly double digits," said Robert Brindell, managing director of Dell partner Kraft Kennedy, based in New York. Dell, he said, is now more engaged, showing its channel commitment with faster access to sales and engineer reps.

Cook said Dell's commitment to the channel, compared with last year when it said it would deliver 200,000 Dell direct accounts to the channel community, is rock solid. "One of our areas of focus has been -- and will continue to be -- our greenfield account program," said Cook. That program, she said, "is how we align the Dell and partner energies and drive new customer acquisitions and business."

Cook said Dell has made good on delivering more than 200,000 Dell Direct accounts to the PartnerDirect channel partner community. Over the past year, Dell has faced a firestorm of criticism from some partners that said they have yet to receive one of the 200,000 accounts.

"Not one Dell direct account has come our way," said Michael Goldstein, president and CEO of LAN Infotech, a Dell and HP partner based in Fort Lauderdale, Fla. But, he said, Dell has upped its co-marketing funds and been rolling up its sleeves alongside his team, helping drive near double-digit Dell business growth over the past year.

"With Dell we can talk to customers about a seamless solution from PC, security, data center, to storage," Goldstein said. "Right now HP is uncharted territory."

Cook said HP's decision to split into a PC and printing business and an enterprise computing business, coupled with upheaval within IBM's server business, is creating a perfect storm for Dell.

"Our win rate against IBM partners and also against competitive opportunities with IBM accounts is up 35 percent," Cook said. "I'm also delighted at the reception and interest that HP partners are taking in Dell," she added.

"Dell is the only end-to-end solutions company out there," Cook said. "We believe the market needs a company that sells both PCs and servers. So, for those partners concerned about the distraction in the market right now, Dell is a very obvious place for them to come to and learn how to expand their business with us."

PUBLISHED NOV. 4, 2014