CRN Exclusive: Dell's Cook On Winning Over Cisco, IBM, HP Partners And Why Timing Is Everything

Cheryl Cook, Dell's vice president of global channels and alliances, spoke to CRN about how the company is aggressively recruiting partners from rivals, the channel battle with Cisco Systems, the hiring of new direct sales reps, and how the Dell open standards offensive is changing the IT landscape.

In an exclusive interview with CRN at Dell's Round Rock, Texas, headquarters, Cook said channel recruitment efforts are gaining traction as more partners are won over by Dell's commitment to flexibility, its focus on gaining wallet share, and the ease with which its programs bring on, integrate and develop partners used to doing business with competitors. Following is an edited excerpt of the conversation.

[Related: Dell Enterprise President Haas: Shifting Industry Will Disrupt Cisco]

CRN: What kind of opportunity do you see with regard to recruiting competitors' partners?

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Cheryl Cook: We've been actively in discussions with IBM partners and HP partners. Specific to Cisco partners, we are getting an increased level of interest in just what our open networking solutions are, the fact that converged infrastructure is clearly a trend. We feel we've got a real leadership position there. With Paul [Perez, Dell's new CTO] joining the team [from Cisco], that's another key indicator of our leadership strength increasing around the open approach and strategy.

Specific to recruiting, I think all of these industry events and the strategy of our competition playing out is just creating an opportunity for a partner to assess and evaluate. We're just trying to make sure we're aggressive in telling our story, telling about our proposition.

CRN: Can you talk about the channel sales dynamics around competing against Cisco?

Cook: One of the beauties of our strategy is we don't advocate ripping out anything. We absolutely are taking a cohabitate kind of approach and strategy trying to build a thoughtful path for customers and partners to be able to take that journey to a more agile and open infrastructure. The ability for [partners] to get trained and understand our portfolio is we honor or grandfather their CCIE certifications from the Cisco program into the Dell program so they immediately can take advantage of our Premier and Preferred status in a meaningful way. And we offer a choice and a path to do it on the customer's time frame, to where they can really work on a strategy and not rip and replace, and I think that resonates.

CRN: Talk about the Dell open software-defined strategy.

Cook: I think the software-defined message is gaining stream, and I think the approach we're taking in fostering and forging really strong partnerships and alliances with those industry trends and leaders is resonating. We're not locking in. We're not a single story in a rigid path.

I think it's market momentum that's pulling us there, but I think customers are looking for options and alternatives, and that is helping. And to be fair, I think Cisco [itself is] doing some rationalizing in [its] partner ecosystem, [it's] doing some modifications to [its] programs and training, and in some cases not all partners are finding the return [on their Cisco investment] all that meaningful to them.

CRN: With software-defined, how much can a partner expect to save a customer compared to Cisco?

Cook: It's showing itself in savings in time-to-deploy, savings in time-to-revenue with your application, savings in administration and management costs rather than purchase cost. Those are real savings, and we're helping our partners articulate that and monetize that and show that in ROI to a customer. We know the approach we're taking absolutely is saving time, so it's time-to-revenue, it's time-to-deploy. It's time of testing, it's all pre-tested, it's all integrated, it's certified.

CRN: Do you think that over time you'll be able to gain share of wallet from Cisco?

Cook: Absolutely. It's going to be specialized, networking-only type partners, but increasingly the proposition of an end-to-end solutions play, the proposition of coming in and playing a meaningful architectural role with converged infrastructure, and where that platform is driving some of these advances in software-defined, is resonating, absolutely resonating.

CRN: What are you doing to make sure those Cisco partners come in?

Cook: The structure, if you look at the monetization opportunity, is very competitive. We do our work to make sure we're market-competitive and we're going to try to differentiate wherever we can. I think acknowledging the training and investments they've already made in their certifications and bringing that learning path into our program is also another example of where we're fast-tracking them into the highest level of our earnings opportunity, with relatively easy ability for them to become certified in our server and converged infrastructure. That diversification for them is an opportunity to participate in a broader environment, not just networking. With all those deep technical skills from networking, it resonates quite easily with our infrastructure and our storage.

CRN: Talk about the strategy to put Cisco partners immediately into the Dell program.

Cook: They don't have to make incremental investment, we don't charge for our training, they get broader access to our end-to-end solutions and, frankly, they're in a thought leadership, trusted adviser capacity helping the customers with software-defined or more agility. Those that we're successful in bringing in agree with the strategy. They understand the multiple paths they're able to take. The monetization, income and rebate opportunities for them are absolutely as competitive as what the other program is offering.

CRN: In the midmarket, is the play to tell partners they're missing out on a big open-standards market by not partnering with Dell?

Cook: We announced at Dell World a net new business expansion and teaming around [line-of-business] expansion. Those partners that come in get the benefit of us guiding them through our incentive structure around converged infrastructure, networking and those kind of complex solutions, and it's targeted at net new business customers for us both, which would be unseating Cisco footprint, and we've had tremendous success in that program. It drove over 12,000 net new customers to Dell in storage, networking and software new business. We're driving an increased demo pool, we're focused on more targets and we're certainly driving those account plans and expansion plans with the partners we have now and the net new partners we have coming in.

CRN: What is the strategy with regard to enterprise partners leveraging direct Dell accounts?

Cook: The line-of-business expansion is an indicator to me of where we're trying to leverage where we may have a customer that has a Dell relationship, they're receptive to Dell, we've got some partner expertise around data center or networking, and we're driving over 7,000 line-of-business expansions, which means they were previously buying one line of business from Dell and they are now buying another. We've got a relationship with an account, and we're bringing a partner in to enhance the relationship and they're growing with us in the data center space.

CRN: Why not up the ante and say for Cisco infrastructure we're going to do 1.5X? What are the new program dynamics?

Cook: Our enterprise growth in the channel the last quarter was phenomenal: strong double-digit growth, 18 percent growth through the channel. That's enterprise. I'm evaluating, and we're working on what program enhancements and modifications we want to make now. We have specific, targeted take-out programs for specific vendors. We have bounties for competitive take-outs. If I'm displacing Juniper as well as if I'm displacing Cisco and Arista, then I'm happy to do that too. It's not about one OEM. We are absolutely taking an aggressive tone and posture.

CRN: You're adding new direct sales people. What impact will this have on partners?

Cook: We just see the incredible timing of the market opportunity we have. HP is splitting, IBM is divesting, and we want to ensure that we're creating enough opportunity in the marketplace that is brand affinity for Dell and serve that demand in an omni-channel way. We just know that we're investing for the long term, we know there's a tremendous opportunity to accelerate the share gains that we've already been achieving. Frankly, we've already been taking share in client, taking share in enterprise. It's further evidence of our desire to be aggressive and to continue to invest for the long term. For partners, this is just going to create opportunity and demand for Dell.

CRN: It's 2,000 new salespeople; what percentage is in North America?

Cook: In the U.S. it's 650. We're putting together our resourcing plan and resourcing models now. That's an investment we're making globally and it'll primarily be focused around our top 10 countries. The U.S. will be about 650 of that. It'll be inside sales and some outside AE [account executive] sales. Some will be partner-facing, but they will all be customer-facing.

CRN: What kind of salespeople are you hiring?

Cook: These will be outbound AEs and internal ISRs [inside sales reps] for Dell that will be responsible for client as well as enterprise. We'll make sure that our enterprise specialists that support them, as well as our specialists that support partners, are available to go drive it. I would think of it as market reach and market coverage in an opportunity where we know we've got a window and we know the timing is phenomenal and, honestly, some of the other OEMs are cutting back. So we're investing. It's just another expression and example of as a private company we're betting on the long term and we know that there's a rush to accelerate the share gains we've already been seeing.

CRN: How big is that window of opportunity for Dell?

Cook: I just think that this market is moving fast. For us, I think we just see an opportunity to be more aggressive. I don't know that it's going to shut, but I think the transition and the inflection we've been seeing in the market is going to continue. I think as HP formalizes the closure of their strategy in November, that's going to create more compelling opportunities for both customers and partners to explore. I don't know that I see it closing. We just see it open for sure, so we're just driving into it.

CRN: What are you doing as you bring in the new salespeople for training to make sure they get the channel story?

Cook: Part of our on-boarding process beyond just Dell product training and consultative training, we've integrated channel engagement training. How to go team with the channel effectively, what our rules of engagement are with our partners around deal registration, certainly around compensation training, around the 1.2X modifier [for Dell sales reps selling through channel partners]. We've added more specifics around how we want to engage the channel, and that'll be ongoing. We unified and centralized our learning and development function. I've taken my channel training and it's all within the same organization that is creating all the content and curriculum for the Dell team.

CRN: What impact has the training initiative had on partners?

Cook: That gives my partners access to the exact same course content curriculum at the time I make it available to the Dell team, as we're creating and enhancing these partner engagement philosophies. That gets integrated into the same delivery system from a training perspective. It gives me scale and it gives me timing. We're going to continue to integrate partners into our training.

CRN: What are you looking for from distribution?

Cook: They're in an important partner for us. They certainly are serving some of the existing partners we have now. They give us market reach. For all the reasons we've been discussing, they can help us reach a group of partners we perhaps weren't reaching already. They can help with partner choice.

CRN: How does the U.S. break out from the world in terms of percentage of Dell business?

Cook: It's pretty balanced. Global revenues for Dell are not 50-50, but it's close.

CRN: Can you talk about the partner opportunity with Dell around cloud vs. Cisco Intercloud, HP Helion, and how you're structuring the program? What's your vision there?

Cook: The difference between what some of the other programs are doing and us is I don't have a public cloud agenda where I'm trying to steer my partner community to help sell demand to my public cloud. The other thing is we do feel the world is going to live and persist for some time in a hybrid world. The opportunity for us and for our partners is really to be that objective adviser for our customers because we don't have a lock-in bias. We have multiple paths, whether it's Microsoft or VMware or Open Stack, to help consult.

CRN: How will Dell partners make money in the cloud?

Cook: Part of it will be services; there will clearly be a monetization opportunity around services. There's a lot of private cloud consulting, as well as infrastructure to be sold in the way of both hardware and software in terms of private cloud. Then as we step into public cloud, we actually are still working through, and haven't formally announced yet, where the partner program will be around the marketplace and what we're doing with the marketplace and how we ensure there's a role. We are working on that now as we speak. We have a 'cloud builder' competency, so we have about 200 partners that are cloud-builder-certified today that have the right knowledge and expertise to be able to do that. Monetarily, we are taking a different approach than Cisco. We simply are not trying to sell our own public cloud.

CRN: How much of the total available market is Dell going for vs. Cisco?

Cook: I think it's a broader, more diversified offering for partners compared to what Cisco is offering. If you look at the engineered solutions and the workload-optimized blueprint approach that we're taking to market, we believe that we are resonating with what that small and medium customer is looking for. They're looking for blueprints of tested, certified solutions in a VMware or a Microsoft infrastructure that'll satisfy a certain number of users, certain use cases, certain workloads, all with confidence that it's already been optimized and tested by the vendor. That gives a far more diverse opportunity for the partners to sell. Customers in the market are increasingly wanting to talk workload-specific vs. just generic infrastructure. We think we reach, and we think our partners can help us reach, a broader part of the market with a broader array of solutions in a market we think will live and persist in a hybrid kind of model for a long time.

CRN: Do you think the Cisco channel market is shrinking because of the way it approaches it?

Cook: I think it's changing, I don't know that it's shrinking. Their challenge is how to accommodate the consumption models and how the marketplace is moving to consume that infrastructure with the partner programs they have. That's their opportunity to go pursue, and they're leaning hard, obviously, on this cloud model, but we think it's going to be hybrid and it's going to be a private momentum for some time while people assess and evaluate what the alternative is, and we don't think it's that binary today.

CRN: You're getting ready to plan the program for the new fiscal year. Can you talk about what your thought process is in terms of planning the program and investments?

Cook: We're just trying to stay to our game plan, and it's working. We try not to get too student body left or right. I just think the momentum we're currently enjoying and the pace of growth and the balanced performance is a healthy way to grow. We're continuing to stay focused. Programmatically, you will see us delivering more specifics around what our cloud program is and what it means and how it's going to give the partner opportunity with these engineered solutions. You're going to see us focus more materially on MSPs and really where that model is evolving when you look at how much demand is being aggregated with MSPs.

CRN: How will you do that?

Cook: We have subscription models today in much of our portfolios. So it's really how to integrate that into our infrastructure offerings and solutions because we know that increasingly that's the way customers want to buy. You'll also really see us try and capitalize on the market opportunity we see around software-defined and converged enterprise, driving more granularity into our program. We see really huge market momentum and adoption and we're trying to help the partners participate in that in a meaningful way. When you look at the investments we're making in Dell-badged resources in the field, to create awareness and demand for Dell and where we see really great market momentum in products and portfolios, we're trying to refine and tailor our programs to let partners participate in that in a meaningful and lucrative way.

CRN: Where are you seeing the strongest growth in enterprise?

Cook: Our server franchise and 13G has just been phenomenally received. We're just seeing faster-than-we-anticipated uptake on 13G and converged infrastructure. We're taking share and we're seeing robust growth there. Windows 2003 Server sunset, we've got a fabulous program that we've taken to the market on that. That's beginning to resonate, which is delivering growth. In storage, when you look at the way that market is moving, and you look at some of these pure-play storage guys, our storage business is growing faster than the pure-play guys. Our networking business is continuing to grow in strong double digits. Part of it is just good products, and part of it is just reaching the marketplace in a way that is meaningful for our partners to satisfy that need at attractive price points.

CRN: Talk about the Dell-Nutanix hyper-converged product. How is that resonating?

Cook: It's just further evidence of our commitment to the open strategy and approach. Partnerships like Nutanix [are] going to continue to be part of our strategy on time to market. You take the winning, leading server franchise we have with some of the innovative technology Nutanix brings, it's more in line with our approach to help customers and counsel them through the journey in the data center than a locked-in approach. You're going to continue to see us forge and foster those types of alliances and relationships. We have Nutanix partners. We have Dell partners who were also Nutanix partners. Then we certainly have Nutanix partners that weren't Dell that saw the opportunity to come and explore the rest of our program and what might be open to them in servers and other parts of the business. We're benefiting from both.

CRN: Do you have any data on Cisco guys coming into the Dell program?

Cook: I don't have any specific data on our recruitment agenda on Nutanix via Cisco. I could start tracking some of that. I have growth and adoption. Are we attracting those partners, and are they attracted to Dell because of this avenue and path around a hyper-converged solution or is it just a portfolio in general that they can participate in? We're going to continue to exploit the end-to-end solution. Nutanix is in the portfolio, as are our core offerings and FX. It's incredibly good technology, and it gives them a broader, more diverse bag of tools to be able to work with our clients on.

CRN: What's the biggest myth about the Dell channel program?

Cook: To be honest, the biggest source of feedback we get is on engagement, not on the program. We test and validate and try and ensure that we're not breathing our own oxygen on market competitiveness, and [make it] easy to understand. One of the tenets of our program was to be simple and be straightforward. I'm going to continue to always test that and try and enhance so we don't lose that process, so they don't have to have a host of administrators accounting where they are in our program. We want to continue to maintain that while at the same time giving them the path of accelerated growth as it suits their business model. I'm very sensitive to the fact that my ecosystem now has very specialized partners, and it also has very broad infrastructure partners.

CRN: What's the thinking with regard to the breadth of the program in the enterprise market?

Cook: I want to tailor my program to be as relevant to their business model so if I have a security partner or a storage partner, they have the path forward into the highest part of our program in areas that make sense for them; while at the same time for partners that want to expand, they can do that as well. If I can maintain the momentum I am on growing share of wallet, and the bigger partners that do the enterprise infrastructure, which we're focused on, then I can maintain the specialization, the advanced competencies we launched and we're driving around security and storage, then they've got a path in our model and ecosystem [and] don't have to do something that's incongruent to their business model.

CRN: Will you add certifications as you grow your enterprise partner business?

Cook: One thing you're going to really see us focus on is individual learning paths in Dell for individual sellers, and we're going to extend that to the partner community. They'll be around products; they'll also be around storage and networking. We're starting in storage first. It'll be around our converged, probably cloud in our cloud offerings. When I do individual learning paths, I want to acknowledge and protect the investment that a partner may have made in somebody else's ecosystem. If I've got a way for them to test out, or you can show me you've got the qualifications and capabilities, you'll need my unique product training, but if you already understand these other broader [capabilities], that's not an incremental expense for them to come in. We're not going to charge them for our training now. It will help us drive the capacity.

CRN: Dell doesn't charge for training. Is that a big differentiator?

Cook: We've taken a path and have maintained it. It wasn't a profit center for us, and if you look at our program, it rewards the competencies. So, achieving a level is really around your capabilities. We want to try and ensure that we're enabling and training an army of people around Dell IP [intellectual property], not just reselling a box or a platform, because as much as we can, we'll get you competent and trained in the differentiation in our future-ready enterprise, in the data center, in partnerships and alliances around that journey forward.

CRN: Beyond product training, what other education does Dell offer partners?

Cook: We have training that's more financial training and soft skills for partners that want to take advantage of that and want to have the sales side of their organization participate in that too. It's really the spirit of trying to open up and make available the resources that we have in Dell to the partner community. We're seeing a lot of interest from the partner community. The ability to deliver it in the fashion I've just described gives me a lot of scale. I've got a global learning and development organization that has a lot of capabilities to deliver virtual and remote training, but also classroom and face-to-face with access to the Dell team as well.

CRN: Have you done any research on the cost of sales to partners compared to Cisco, or HP, or even just in general?

Cook: I don't know that I've quantified that it's this much advantage to work with Dell as opposed to some of the others. With what's going on at Cisco, I'm increasingly getting partner feedback that they don't know that they're getting the return on what they ask of them in the Cisco program.

CRN: Cisco is really pushing people to make a big capex. How are they trying to change the demographic and how does Dell approach the same market?

Cook: I think they've enjoyed a large market share with selling product, selling boxes, infrastructure. The market and customer mandate is that they're buying workload-oriented infrastructure now. They're not just buying piece-parts in boxes. When you look at consumption models like cloud, I think it's just a journey for them to try to work on the education capabilities of whatever the partner mix is. We are fortunate in the timing in which we're expanding and recruiting and coming into the market opportunity and for what we're going to reward and train to. We're very focused on the workload-optimized conversation. We don't have a legacy of a 30-year-old program, a legacy of transition that I have to try and take a partner group through. It's different timing and different place.

CRN: How do you see cloud impacting the evolution of the Dell channel model?

Cook: I think we're going to see new capabilities in people who build their businesses around this new business model and the cloud paradigm. The industry is transforming, and the partner community is also transforming. I think we're going to see more software skills, more software capabilities, infrastructure and how to marry and align that management and architecture and deployment capability is a different skill, and a lot of services.

It's a tremendous opportunity for the partner community to be able to do the advisory assessment services, to help do consultative services around the inventory of applications and which applications are best served private and which are potential candidates for public. That whole selling motion, I think, will be application-oriented. It will be workload-oriented.

CRN: What are you seeing in terms of consolidation in the partner network?

Cook: We're still seeing some consolidation. I'm seeing more recognition, at least in their businesses, of a healthier balance of service mix in their business in addition to just product resale -- services in consulting and advisory for companies that choose to step into some kind of managed service capability. I think that's going to continue. It'll be interesting to see the consolidation of the specific application-software-focused guys with core infrastructure.

CRN: You guys are going to make a play for the MSP market; how do you see that evolving?

Cook: It's just acknowledging and understanding how users are finding them. We've evolved from just a hosting facility to somebody who can do the real estate or rent. Now, it's up to and including managing the customer experience, managing the application and workloads. I think it fits well, honestly, with what we're seeing around our engineered systems. It's acknowledging that they're part of the ecosystem now and a partner type for satisfying and serving customer demand. We benefit from being present in a lot of those companies now. Now, I think they are part of the ecosystem and really getting that model right and recognizing that there's strong partnership and a role that we can play on how we help drive demand to them and how we help ensure it's satisfied with Dell infrastructure, help drive usage.

CRN: How are partners responding to the open standards Dell push?

Cook: Flexibility and openness has tremendous value. We're not taking a revolutionary approach where it's binary rip-and-replace; we're taking an evolutionary path that allows you to co-exist. Our systems management, our ASM, is one of the only alternatives in the industry that allows you to manage heterogeneously. It's acknowledging that you've got an investment on the floor, you've got a journey and a vision of where you'd like to go. We think we offer a least disruptive, but economically viable, faster [alternative] than some competitors.

CRN: How do you help partners get their minds around that?

Cook: It's open standards, so it's a little bit of where we grew up from vs. where some of the others grew up from. I think the market is coming to us. The market is coming to industry-standard form factors, software extracting from hardware, giving a degree of flexibility. Our differentiation is in the integration of management interfaces, it's in how you can operate and manage that infrastructure more effectively and help the partners understand how to train to that, how to speak to that differentiation as opposed to a locked-in, all-in stack of hardware, firmware or software.

CRN: Talk about how software startups play in the Dell open environment.

Cook: We're enabling that openness with early funded software startups that are doing software-defined appliances. They're finding us and working with us in creative ways just around the server and the controller and how they can further integrate in our management tools and software. Our OEM business is meeting a lot of those early startup guys in the ecosystem that way as they evolve and grow up. It's fortuitous that we don't have the legacy to try and turn, because I think the pivot point right now in this market is moving so fast, we're just positioned to be more agile and make that change faster than some of the other guys and do it as a private company who is making strategic investments in R&D, in M&A, as well as what we're doing in sales to be able to take it forward.

CRN: Talk about where you see networking share gains.

Cook: We're gaining share for sure from HP, Juniper, I think. If you look at how our technology is growing and being consumed, the story is resonating. We aren't a rip-and-replace alternative; we have flexibility in the model with the alliances and partnerships we've forged. We're continuing to drive focus. Yes, it's at Cisco's expense too, theirs is the largest market share, but I would say it's primarily HP and Juniper.

CRN: Where's the biggest opportunity to differentiate the Dell vision going forward in the channel vs. competitors?

Cook: I think we've got a more open strategy that is resonating in the marketplace, phenomenal technology, and we give partners an opportunity to play a bigger role in the diversified portfolio that we have. As it goes converged, as it goes software-defined, we've just got really competitive programs and alliances and partnerships and technology to capitalize on that market opportunity. We have enough momentum in the market right now. We're a winning team, and a lot of people want to be on a winning team.

We think we've got a winning strategy, we think we've got a winning lineup of products and solutions, we think we've got a winning channel program and we're here to play to win. We're being aggressive.

CRN: You've added a lot of talent in enterprise. Do you think channelwise you're going to be bringing in more talent from outside?

Cook: We're looking at always strengthening our leadership bench. If I look at the DNA we have in the company, that we've brought into the company, that advocates and understands the channel, they are completely integrated with me on how we ensure we're partner-ready with what we're bringing to the market. They certainly have points of view on what the opportunity for the company is or they wouldn't be here and how to help create that opportunity for the channel and how the channel can help Dell accelerate where we're trying to go. I view them as really good DNA in the leadership. If I get the opportunity to strengthen that bench with others, I might do so.

CRN: What's your goal for the number of partners that are Dell-only?

Cook: We've got 4,300 certified partners, that's not all exclusive Dell. I'm not desperate that that needs to double or be bigger. I would like more wallet share, share of wallet expansion in those partners that have made enough of a commitment with us, but are still carrying the other lines, primarily in the enterprise space. We're also going to be putting some more thoughtful programs in place around specialty partners and recruiting around that space where we want to increase the capacity around data center, storage, networking skills and capability. We think the timing for us is fabulous, frankly, because of curiosity about the Dell program. We'll be getting more thoughtful and prescriptive, if you will, around recruiting.

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