Dell-SilverBack Partner Conference: More Assurances, Less Answers

Dell told SilverBack Technologies MSPs this week that it plans to sell managed services directly to end users as well as partners in a program that will eventually require deal registration. But exactly how the program will be structured -- and priced -- is still up in the air, said executives who attended this week's partner conference in Scottsdale, Ariz., for about 175 SilverBack MSPs.

"They will be going direct. I think we all know that would be the case," said one attendee, who asked not to use his name.

SilverBack MSPs shared many concerns with Dell over the two-and-a-half-day conference and Dell addressed them as best they could, said attendees. In many cases however, there were more assurances than answers. One of the biggest concerns shared by partners -- and still to be addressed by Dell -- surround the rules of engagement for end users who are current customers of an MSP.

Because the deal registration program is for specific opportunities and does not cover the customer as a whole, customers could end up buying managed services from both MSPs and Dell, a situation MSPs would like to avoid.

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Dell was very specific in noting that the managed services registration is for a specific deal, not the client as a whole, said Paul Cronin, senior vice president at Atrion Networking, a Warwick, R.I.-based solution provider and MSP. "That's a concern. Most times, you can get more protection from a vendor, especially when you're embedded that much with a customer. It's definitely a point of concern, but it's nothing that's been nailed down," he said.

MSPs at the conference were told that Dell sales agents will be compensated equally for selling managed services direct or through a partner. "I want to be able register a deal, but also I want to protect my current customers. I want to be able to register them so that [Dell] does not offer them the checked box for managed services when they call Dell to buy a PC or server," said the MSP who asked not to be named. "That creates a problem for me."

Despite the concerns, the MSP said he left the conference feeling better about the Dell/SilverBack merger than when he arrived. "The association with Dell will be good for managed services. Because of the magnitude of the company and their marketing capabilities, they will help us educate the market on managed services and benefits. I feel like Dell is trying real hard to create this partner channel program. They're focusing a lot on that, but it's a learning process for them. They're trying hard to get where we would like to see them get," he said.

Brian Sherman, director of business development at Autotask, a software partner of SilverBack, was also at this week's conference and felt Dell gave the right assurances to MSPs on hand. "There was a lot of concern because of Dell's history, but information was given to [dispel the concerns]," Sherman said. "They said their preferred route to market would be to work with the partners because they're the experts and can get to end users."

Dell's channel chief Greg Davis answered a long Q&A with partners, hoping to address all concerns, Sherman said. "He talked about changing the organization on the fly. It showed he was interested. It will take a while to build trust, but the guys I talked to were encouraged," Sherman said.

Dell also told Autotask that it would open up its API to allow for better integration of Autotask's services management applications, Sherman said.

Next: Long Time, No See

It's been nearly six months since Dell acquired SilverBack and this week's conference marked the first real communication to Silverback partners since the merger, said several partners.

Stephen Wright, president of Wright Business Technologies, a Houston-based MSP and SilverBack partner, could not attend the conference, but he was eager to hear any tidbit of news coming from Dell. "I've heard absolutely nothing about the future for this product and how it affects dealers and whether they will continue to be VAR-only or sell it directly. That's one of my frustrations. Since Dell has taken over, there's been so little communication," he said.

SilverBack used to be a very open company with its partners, he said. "Since the buyout. I'm not saying they're not accessible. We can still call the same people and they say, 'Yeah, everything's normal.' But Dell just doesn't seem like that kind of company to acquire somebody and then not make any changes."

Wright said he may look at investing in another managed services platform vendor if Dell is not more forthcoming on SilverBack's future. "We're certainly looking to hear what happens. I'm not saying we will switch. As of right now, the platform still works and it's getting the job done. If they come to me and say next year's renewal is due now and they haven't told me what's going to happen, I may consider switching. I just feel like I don't have a clue. I can't base my business on somebody who's not talking."

For another MSP, the wait has already been too long. Xperteks Computer Consultancy dropped SilverBack's platform in favor of N-Able Technologies about three months ago because of the lack of communication, said Marcial Velez, president of the New York-based company.

"I went to the [CMP] XChange event in Orlando [last year]. I spoke to [former SilverBack CEO] Dan Phillips. He didn't even seem to know what going on. Partners heard about [the sale to Dell] the same time as everybody else. It just didn't seem like a partnership was there," Velez said. "I couldn't prepare for anything new. [The news] goes out on the Internet, now I have to react to it. That's weird coming from a company that had such a proactive model with partners."

The MSP who asked not to be named stressed to Dell executives at the show that communication was imperative to a strong relationship. "We said let's not wait another year before we talk again. Let's back in the next quarter," he said. "We were very open with them. They listened. Hopefully they'll come through and resolve the couple of issues."

Dan Phillips, global director of channel services for Dell and Silverback's former CEO, acknowledged that it's been hard not to share more information with partners.

He said his keynote to partners at the conference apologized for the lack of communication. "This has been a very difficult five-and-a-half months for the former SilverBack team. We haven't been able to communicate and share and respond in the way that we used to. But it was for a very, very good reason," he said. "If you're a $60 billion company and have 80,000 employees and managed services and the channel are long-term strategic plays for you, by announcing everything before its time or before it's fully understood puts you at risk of losing billions of dollars. It's a very unfortunate situation, but a very necessary situation to be in."

Being able to talk to 175 people to a partner conference this week was "a cleansing" for SilverBack, Phillips said. "We got to talk for 2-and-a-half days, and share a tremendous amount of data. And I think our partners that came were wanting more. Our strongest feedback was to have another partner conference, soon. But I think they left believing that we are very serious about building a world-class managed services platform and being the de facto standard for managed services, and bringing channel along with us."

Is The Price Right? Perhaps the area least clearly defined is around Dell's pricing for managed services to customers.

Cronin said he was told it's possible that Dell's pricing to end users could be higher than through partners. "But they weren't committing to that. There's no guaranteed price right now," he said.

Dell's Phillips said it's too early to discuss pricing. "We have not defined a direct offering, period. So it's premature to announce pricing and how it is going to fit. It is fair to say to that managed services through the channel is strategic to Dell. And as we put this program together, we have no desire to put pricing in place that inhibits that strategy," he said.

Dell also told MSPs that it plans to move SilverBack's managed services to a hosted model at its own data center, eliminating the need for partners to invest in their own infrastructure. Some attendees liked the idea, but others expressed concern about transferring their customers' data to a third party and disrupting compliancy issues.

"They said it will start as an option in the next six months, but it's inevitable that it will be the only way it's available," Cronin said. "That's when everyone brought up questions. That's a huge issue they're going to have to address. But a lot of people said Dell could build a data center far better than mine."

Cronin's biggest concern -- addressed but not solved --is whether SilverBack will continue to develop services around products that Dell does not sell, such as Cisco Systems networking gear.

"We're a Cisco Gold partner. That is a huge fear. There's already been too much time taken away from R&D because of the acquisition. If they're focusing R&D on Microsoft and servers, it will really have an effect on us," Cronin said.

Dell told him that it will continue to develop around other vendors, but Cronin added "They're behind the 8-ball today. They need to do extra work just to get that caught up. That's a huge issue," he said.

But like the others, he was satisfied with the output from the conference. "The one thing we heard from Greg Davis, one powerful sentence was, 'You are our customers.' That to me was very important," Cronin said. "Going into this, we were all questioning Dell's ability to create a channel right the first time. For him to look at us, truly as customers and mean it, that's the right mindset for Dell to begin building this channel."