Dell EMC Goes On 'Attack' With New Incentive-Packed Partner Program, A 'Giant Leap' Forward In Channel Economics
Dell EMC is going on the "attack" with a new single partner program that nearly doubles the storage rebates from the legacy EMC program and rewards partners handsomely for selling hyper-converged and converged infrastructure solutions combining server, storage and networking products.
Dell EMC's ambitious goal with the launch of the new program: nothing less than to deliver partners the most profitable partner program in the industry, bar none.
"This is a giant leap forward in what is an extremely compelling opportunity for all of us together," said Dell EMC President and Chief Commercial Officer Marius Haas in an exclusive interview with CRN. "I am pretty certain that this will establish Dell EMC as the premier partner for the channel."
The program – which packs a whopping 20 percent potential payout on storage products including hyper-converged products -- sets up an epic battle for data center market share with the $74 billion Dell EMC using its newfound scale and its large and energized partner base to take a bite out of chief competitors Hewlett Packard Enterprise, Cisco Systems and Lenovo.
The program rolls out officially today, and comes just five months after the close of the largest acquisition in IT history -- Dell's landmark $58 billion acquisition of storage market leader EMC last September.
First and foremost, the new program ratchets up storage rebates for the mainstay EMC products like Data Domain, XtremIO and VMAX all flash to 4 percent compared with 2.5 percent in the legacy EMC partner program. But that is just the beginning. From there, partners get a whopping 6 percent storage growth rebate once they go above the 100 percent sales quota. And if that isn't enough, then they get another 1 percent for going 120 percent above quota.
The other stackable incentives in a potential storage windfall for partners include a whopping 8 percent new business account incentive rebate and 1 percent incentive for attaching services.
The stackable 20 percent payout for storage products extends into the fast-growing hyper-converged product lines for Dell EMC including VxRail, VXRack and the Dell-Nutanix XC Series.
"We want partners to be aggressive and attack the market and know how much more money they are going to bring home," said Dell EMC Global Channel Chief John Byrne, who has overseen a massive effort to combine the enterprise-based EMC program and the more client/server-based Dell program. "We want them pay off their mortgage, feed their kids, and get their kids to university."
Byrne said the robust stackable compensation incentives in the new program are aimed directly at getting partners to sell the full Dell EMC product portfolio versus a competing offering from the likes of Cisco, HPE or Lenovo. Currently, he said, Dell EMC partners are selling on average just 1.55 Dell EMC business lines.
"We know that when we don't have the business it is with a competitor, and when it is with a competitor it is more than likely with a channel partner," said the fiercely competitive Byrne. "We want to get that business. If you are selling our servers, sell our storage. If you are selling our storage, sell our servers. I believe that we can take significant share from the competition."
To add even more channel fuel to the fire, Dell EMC plans to extend its popular line-of-business incumbency program – which gives partners priority in accounts they are already serving – into server and networking, effective sometime in the first half of this year. "That is a big, big change," said Byrne. "That is tectonic change in the way that we go to market."
In addition to the more than $150 million in Dell EMC is investing in channel incentives in the current fiscal year, the company has also invested "tens of millions" of dollars in fully automating rebate payments with an end-to-end system designed to set a new industry-standard channel benchmark.
The Dell EMC investment includes a new online calculator, which will be available Feb. 20, and supply chain improvements that ultimately could save partners millions of dollars in sales, general and administrative costs. Some enterprise partners, in fact, had as many as four people tracking rebates before the system was automated.
"We will automate all rebates, taking cost and friction out of the selling motion," pledged Byrne. "They will be able to see weekly what they are buying from Dell EMC and how much money they are making. They'll be able to see every single week what did they buy, what did they earn from that specific product, and how much money is coming into the company. It's a big deal – a massive investment for the company."
Haas, for his part, said the new program clearly addresses what partners saw as an erosion in the EMC incentives. "That was something partners were complaining about – the erosion of the [EMC] program – both front end and back end," he said. "We have addressed those. We have got significant incremental funding that we have put into that equation. I have no doubt that is going to have a massive impact. "
That investment fits into what Haas calls Dell EMC's all-out offensive to drive a "broader focus" from its partners with an eye toward getting them to sell "more solutions like hyper-converged – selling server, storage, networking combinations. "We wanted to make sure that we had a predictable engagement model that cuts across the full solution, especially around the data center side of the house," Haas said.
That predictability will allow Dell EMC to win market share away from HPE, Cisco and Lenovo, Byrne said.
"Our share of wallet is low double digits," Byrne said. "I believe that we can take significant share from the competition with this predictability of engagement. ... I believe that we can take market share across all segments next year."
To do that, Byrne and Haas have given solution providers two ways to advance through the program's Gold, Platinum and Titanium tiers. One track is for partners that book big revenue while selling a limited number of product lines. The other is for partners that sell a wider range of products but book less revenue.
For now, the tiers are based on broad revenue ranges. Byrne's team intends to lock into more specific revenue requirements sometime around August. Partners will have until Dec. 31 to complete necessary competency requirements and until Feb. 2 of next year to reach the tiers' revenue requirements.
In the first track, a partner selling a single product line can be a Gold partner with between $5 million and $15 million in revenue. That partner can be a Platinum partner with between $25 million and $50 million in revenue, and a Titanium partner with between $50 million and $100 million in revenue. Those tiers also require partners to sell a minimum of $1 million, $4 million and $8 million in services annually, respectively.
In the second track, a partner selling one portfolio can make Gold with between $500,000 and $3 million in revenue. Moving into the Platinum tier requires partners to sell two or more lines while booking between $5 million and $15 million in revenue. The Titanium tier requires partners to sell two or more product lines and between $25 million and $50 million in revenue. The tiers in the second track require partners to sell $750,000, $1.5 million and $6 million in services annually, respectively.
Once a partner makes its way into a tier, rebate eligibility is based on achieving portfolio competencies.
Dell EMC is also driving aggressive stackable benefits for both server and clients with respective payouts as high as 15 percent for servers and 8 percent for client systems.
For servers, partners get a 4 percent base rebate, a 1.5 percent growth rebate, 1 percent for attaching services, the 8 percent new business incentive and 0.95 percent MDF.
Solution providers that sell the Dell client business get a 1.5 percent base rebate, a 1 percent growth rebate, 1 percent for attaching services and 0.50 percent MDF.
To make sure that it maintains what it is calling the "premier" partner program in the industry, Dell EMC has set up a "channel competitive lab" aimed at ensuring competitors like HPE, Cisco and Lenovo do not one-up the Dell EMC incentives, said Byrne.
"If a competitor sneezes, I want to know about it," he said. "We are actively looking at what are the moves [by competitors] and what is happening. We are looking at is our program dynamic enough? Are we competitive enough?"
The new channel program is designed to get partners to advance through the program's tiers, and Dell EMC is dangling the ultra-exclusive Titanium Black designation in front of partners as a way to create "tier envy."
"The No. 1 question Marius, Michael [Dell, chairman and CEO] and I get is, 'How do I get to be Titanium Black?' Byrne said. "We are already driving that motion. It is exciting. We are already working on customized goals for partners."
Haas, for his part, stressed that the "more business you do, the more lucrative the program is," referring to Titanium Black. "You can only imagine that if you sell a broad set of portfolio at scale that might be one of the criteria that would put you in that category, which is a very, very small select group," he said.
The new program is backed up with a stringent "zero tolerance" policy on deal registration. Dell EMC salespeople who violate that policy risk getting fired, Byrne said.
"If there is any violation of deal registration there is a zero tolerance policy," Byrne said. "It is written into your HR rules. It is written into your compensation rules. Here is what I mean by that: Should there be a violation of deal registration we are going to assume it is a mistake. You are a good person and you made a mistake. With that mistake it means that, should something have happened, you as the salesperson are not going to get sales commission on that deal. Should it happen a second time we wish you very well and thank you very much. That is what we mean by zero tolerance."
Byrne, who has a manic focus on accountability for himself and his team, said now that the program is in partners' hands the time has come to focus on sales action rather than sales rhetoric. "Talk is cheap," he said. "We have got to execute like crazy."