Dell Partners Get 20 Percent Incentive For As-A-Service, Referral Deals

Dell Technologies is now giving channel partners 20 percent upfront incentives on as-a-service and consumption-based contracts, including for referrals only, around its broad infrastructure portfolio in a move to provide incentive assurance and be more competitive in the market.

“We needed to be more competitive and to make sure partners had a profitable business as they grew into this as-a-service area,” said Darren Fedorowicz, vice president of Dell Financial Services and Global Channel Sales, in an interview with CRN. “We are increasing the incentive for partners at all tier levels where if it is storage, hyperconverged or converged infrastructure, PowerStore, data protection, networking, etc., they can earn up to 20 percent of the committed contract value.”

Additionally, Dell will still provide a partner will 20 percent incentive of the committed pay-per-use contract deal even for just a referral.

“For example, if a customer is interested in a $1 million storage transaction but said, ‘What I really want to commit to is a baseline capacity of $700,000 over four years, and I want you to bill me on a monthly basis for that $700,000. And whatever I use in my buffer capacity, bill me for that as well.’ Well the partner would earn 20 percent of the $700,000 committed contract value or $140,000 upfront, regardless if they simply referred it to us and we managed it,” said Fedorowicz. “Or if the partner wanted to participate in the management of billing, collecting, potentially adding more incentives or services overtime, they’ll still earn that $140,000 upfront.”

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The 20 percent upfront incentive is part of Dell’s Flex on Demand pay-per-use financial program from Dell Financial Services. The program offers 10 percent upfront incentives on server as-a-service deals. Last month, the Round Rock, Texas-based company expanded its preapproved and preconfigured pricing for partners to now span across its entire infrastructure portfolio when leveraging Flex on Demand.

Fedorowicz said Dell Technologies is now in over 40 countries selling Flex on Demand. The company has over 2,000 as-a-service customers, with an as-a-service run rate of $1.3 billion as of Dell’s second fiscal quarter, up 30 percent year over year.

Bob Keblusek, chief technology officer at Sentinel Technologies, who began to offer as-a-service solutions nearly a decade ago, said partners today should be investing heavily in lifecycle services as more customers buy as-a-service and consumption-based IT solutions.

“We’ve invested in a full lifecycle service offering consumption as-a-service where we can handle billing, management of accounts and consumption, consultative optimization of consumption across multiple partners and subscriptions, as well as systems such as ServiceNow which we invested heavily in for the future,” said Keblusek.

Keblusek said Dell’s 20 percent incentive on as-a-service is “beneficial” for his Downers Grove, Ill.-based company and is “appealing” for customers changing business needs who demand more flexibility in their IT purchases similar to what the cloud offers. The CTO said it is a complex move for Dell and other vendors to create new go-to-market strategies around consumption-based offerings, but it’s a necessity for today’s IT buyers.

“Execution has varied by our various vendors and I hope that Dell will execute in a way to bring solution providers value that are investing in their as-a-Service transformation,” said Keblusek. “But also keep the customers in mind as to what is important to their business by consuming an as-a-Service offering. This is new ground to many of our customers as well, so the programs need to align and also make it easy for our customers to understand, manage and get value from these programs.”

At the Dell Technologies World Digital Experience conference in October, the company unveiled Project Apex: Dell’s long-term as-a-service strategy that will impact the way it develops future product, sells solutions to customers and enables the channel to drive recurring revenue.

Project Apex will unify Dell Technologies’ as-a-service and cloud strategies, technology offerings and go-to-market efforts to provide a consistent experience wherever a workload runs, including on-premises, at the edge or in public clouds. The first as-a-service offering for Project Apex is the Dell Technologies Storage as a Service, an on-premises as-a-service portfolio of scalable and elastic storage resources that will offer block and file data services and a broad range of enterprise-class features.

Dell’s Storage as a Service, which will become generally available in the first half of 2021, won’t replace Flex on Demand, “but be complimentary to continue to offer choice and flexibility” to partners and customers, according to Fedorowicz.

Cheryl Cook, senior vice president of global partner, embedded and edge solutions marketing at Dell, said Flex on Demand adoption rates are increasing with expectations that channel sales will grow thanks to the new 20 percent upfront incentive.

“We’re enhancing the earnings opportunities to continue to fuel partner growth,” said Cook in an interview with CRN. “Partners play a critical and pivotal role in serving that demand and needs with our customer base. It’s a step forward in our vision to offer increased flexibility and a simplified user experience around everything as-a-service.”