Partners: Dell EMC Program Is A Channel Game-Changer, Puts Heat On Cisco, HPE

Dell EMC partners said the new Dell EMC profit-packed partner program puts the $74 billion behemoth into the same heavyweight class as channel stalwarts Cisco and Hewlett Packard Enterprise.

Fred Traversi, president and CEO of Alpharetta, Ga.-based Rolta AdvizeX Technologies, No. 91 on the CRN SP500, one of just 10 EMC Platinum partners in the country, said the new program packs more profit margin potential upside than any other channel program in the industry.

"This program is greater than anything we could have possibly imagined," said Traversi. "To say I was surprised is an understatement. I was shocked at the amount of added profitability for an EMC partner. It is not small. It is very big. I just can't emphasize enough how incredibly strong a financial program this is compared to the old EMC program. It is a 50 percent improvement in our profit margins. This program is now fully competitive with more upside than any program in the industry."

[Related: The 10 Biggest Dell EMC Stories Of 2016]

Sponsored post

Dell EMC has a slew of stackable incentives aimed at getting partners to sell the full portfolio of products from client devices to hyper-converged offerings and the full array of storage, server, and networking products integrated into a full solution.

The program packs a whopping 20 percent potential payout on storage products including hyper-converged products like VxRail, VxRack and Dell XC Nutanix. The company 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.

"Dell EMC has been very clear what it takes to get to the upside," said Traversi. "If you sell across the Dell EMC portfolio this program is unusually profitable."

The "single biggest upside" in the program is centered on new business incentives aimed at driving partners to work hand in hand to go to market with the Dell EMC team to drive net new accounts, said Traversi.

"This program is clearly going to force people to reevaluate how they more forward in the marketplace," said Traversi. "Of course, if you are a partner with a strong Cisco business or HPE business it will not be a simple business decision to make. The question is which OEM do you go to battle with for the next new logo for you and that OEM? This program makes it more attractive to beat the other OEM competition with Dell EMC. For those people willing to put in that hard effort, there is a huge reward for doing that."

Traversi praised Byrne and Dell EMC Senior Vice President Global Channel Sales Gregg Ambulos for driving a program that delivers strong channel engagement with the Dell EMC sales force. "The program will have a significant impact on our ability to work with the Dell EMC field," he said. "That is significant. It's a strong step forward."

Partners said the biggest immediate impact from the breakthrough program will be added pressure on storage and server vendors without the same financial muscle of Dell EMC such as NetApp or Pure Storage.

"Those products are vulnerable," said one top Dell EMC partner, who did not want to be identified. "This program makes you more money to take them out than you would get selling those products independently. This is going to marginalize third and fourth tier OEMs."

The new program over the long term could eventually lead to a significant shift in sales and technical resources away from Cisco or HPE toward Dell EMC, partners said. "That issue of displacing a major OEM is probably a year away," said one solution provider executive, who did not want to be identified.

Dan Serpico, CEO of FusionStorm, No. 49 on the CRN SP500, said the program allows Dell EMC to go toe-to-toe with Cisco in the data center.

"It clearly puts them on even footing with Cisco," Serpico said. "There are some opportunities with Cisco that are better, and there are things in the Dell EMC program that are better. I like that the Dell EMC program is a one-year plan rather than a six-month plan so you can invest in the longer term.

"They both have great programs, and to say I would choose, I might say I would choose this one first. Being able to invest for the longer term is clearly a tiebreaker, and we're looking forward to the portal being up and running. The tracking will be better, we'll be paid faster than with the Cisco plan, and there's significant upside to that."

Sonia St. Charles, CEO of the Davenport Group, a St. Paul, Minn.-based solution provider that sits on the vendor's partner advisory board, said she sees only upside to the new program even for smaller partners like Davenport Group.

"We hadn't anticipated that the rebate program would be nearly this rich, and I hadn't conceived that they'd be able to level the playing field between a company my size and a much larger EMC solution provider," she said.

Scott Winslow, CEO of the Winslow Technology Group, a Waltham, Mass.-based solution provider that works with Dell EMC, said the program makes it clear that partners must grow, and they must do it by taking business from Dell EMC's main data center rivals.

"They're very clear on what behavior they're going to reward, growing new business and growing new business in the enterprise, in storage, servers and networking," Winslow said. "And that means we'll have to take it away from HPE, take it away from IBM. If you can add new lines of business, if you can add accounts, they're going to reward that. If you can add services, sell services, they're going to reward that. They keep beating that drum."

The program stresses storage, server and PC product lines with stackable rebates paid from the first dollar. Those rebates nearly double legacy EMC payouts while pushing solution providers to win new business and sell across the company's entire portfolio. And thanks to what Dell EMC Global Channel Chief John Byrne characterized as "tens of millions" of dollars in investment, the new rebate system – including an online calculator and tracking – is fully automated.

Dell EMC has provided two paths 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.

Winslow said that system is particularly useful to regional solution providers like his company. "They've got two tracks. One would be for large, national VARs that create a lot of revenue. The other track is for us, a regional player," Winslow said. "We don't have to have as large a spend, but we get a 1.25 percent kicker for being exclusive, and that helps us get to these levels."

Winslow agreed with Byrne's assessment that the requirements for advancing through the program's tiers are "aggressive but realistic," adding that if recent years' growth is any indication, the solution provider would have to book "a little more revenue than we did last year" to maintain its place in the Titanium tier.

"I think we can do it," Winslow said. "We have EMC products in the fold now. We grew our Dell EMC business 70 percent over last year. We need to do that again, and I think it's doable."

Partners are also enthusiastic about the program's automated rebate calculator and tracking system, which Byrne said the company spent "tens of millions" of dollars developing.

"It's going to make it a lot simpler to understand where we are, where we stand," St. Charles said. "Commission programs, or any type of incentive program, if I have to sit down with a spreadsheet to understand it, it typically doesn't impact my decision making in the short term. This is good for Dell and for us. The tool has tremendous potential no downside."

Michael Tanenhaus, CEO of Mavenspire, an Annapolis, Md.-based solution provider that works with Dell EMC, said rebate automation is a clear sign that Dell EMC is committed to moving its program forward.

"They keep evolving it, they keep pushing to get it better and better," Tanenhaus said. The automated rebate system "wires [funds] to your bank account, and you don't have to get involved. It does that well, and you can see the reporting of it well. Compared to the old systems, it's a huge upgrade, and compared to what other vendors do, it's a huge upgrade."

Steven Burke contributed to this story.