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Dell To Partners: Step Up On Refresh, Seize On Front-End Margins

The IT infrastructure giant wants partners to rally around its Tech Refresh and Power Up programs to drive new PC and server sales while also taking advantage of new front-end margin opportunities. ‘We’ve now just made it more compelling, more competitive than ever before,’ Dell’s Cheryl Cook says in a talk with North American channel chief Gregg Ambulos at The Channel Company’s Best of Breed Spring 2021 event.

Dell Technologies wants channel partners to refresh, upsell, cross-sell and seize on new front-end margin opportunities to keep PC and server sales moving at a brisk pace.

That was the major message in a Wednesday talk by Dell’s Gregg Ambulos, senior vice president of North America channel sales, and Cheryl Cook, senior vice president of global partner marketing, at the Best of Breed (BoB) Spring 2021 event, hosted by CRN parent The Channel Company.

[Related: New Intel Global Channel Chief Vows To Bust Barriers For Partners]

Ambulos said Dell’s partners in North America played a “significant role” in the company’s record-setting 2020. In that year, Cook (pictured above) added, the Round Rock, Texas-based company’s results showed that the “world needs more technology, not less,” which is supported by the release of nine new products in nine weeks so far this year.

Now into the company’s fiscal 2022, Dell wants to keep that momentum going.

“Our priorities, Cheryl, haven’t changed,” Ambulos said. “We want to continue to expand our buyer base. That is very important. We’re looking at continuing our acceleration, both on the client and server sides of the house.” Dell also wants to lead on the storage side with the new midrange PowerStore storage offering, he added.

Dell wants partners to keep sales flowing through two previously announced programs: Tech Refresh, where partners replace aging technology with new systems from Dell, and Power Up, where partners are given access to Dell enterprise, commercial and SMB accounts to find net-new opportunities in underpenetrated accounts with the backing of Dell’s internal sales teams.

“We’re looking for our partner community to really rally around these two initiatives, and that’s going to help us achieve our key priorities,” Ambulos said.

Dell also wants partners to take advantage of the company’s new front-end margin approach, which can enable partners to earn 20 points of front-end margin on average. The front-end margin applies to Dell’s PowerStore, PowerScale and Isilon products, according to Ambulos.

“And that’s on top of all the rebates that they earn for base rebates and some of the behavioral rebates that we also pay, along with MyRewards,” he said.

These new and updated programs represent the work Dell has done in refining the Dell Technologies Partner Program based on feedback from partners, according to Cook.

“The strategy’s working. The program’s working, and we’ve now just made it more compelling, more competitive than ever before,” she said. “And we’re definitely seeing partners resonate with the Power Up cross-sell, upsell, multiple lines of business.”

Ambulos said partners should attend the virtual Dell Technologies World event May 5-6 to learn more about the company’s plans for Project Apex, which will make the company’s portfolio of products available through an as-a-service consumption model.

“Stay tuned because we’re going to be very aggressive in making sure we educate all of you on the attributes and the value of that offering,” he said.

Josh Lee, director of sales at VirtuIT Systems, a Nanuet, N.Y.-based Dell Technologies Titanium partner, told CRN that his company is already seeing a major impact with Dell’s new front-end margin approach with products like PowerStore, which he called an aggressive move on the vendor’s part.

“You can see the front-end difference out of the gate without having to go get any kind of special requests on pricing or anything,” he said.

While it may not translate into ViruIT Systems making 20 points of margin on every single deal, Lee said, it’s allowing the company to be more aggressive with sales for products that are eligible for the front-end margin, particularly for Tech Refresh opportunities.

“We’re using it in tandem with the Tech Refresh because we’ve got a lot of assets that are that are being refreshed right now,” he said.

Dell and Arrow Electronics, VirtuIT Systems’ distributor, are making it easier to tackle Tech Refresh opportunities in different ways, according to Lee. While Arrow is providing VirtuIT Systems business intelligence on assets that need to be refreshed, Dell is helping the reseller create sales quotes and materials that highlight the return-on-investment and total cost of ownership benefits associated with replacing old systems with new ones.

“Instead of just saying, ‘you’ve got an old asset, here’s a new quote,’ it’s, ‘you got an old asset, but here’s how much power savings you can get it, here’s how much more efficient you can get, here’s how much rack space you can save,” Lee said. “They’re giving us a lot more higher-level things that lets us talk to somebody further up the chain [at a customer account] as opposed to somebody who’s just a technical contact to the account.”

With Power Up, Lee said, Dell’s sales teams appear to be “more incentivized to go actually proactively work with partners to go win business.” While Power Up itself hasn’t presented any new margin opportunities, the program can provide new business leads, “which is super valuable,” he added.

An executive at a larger solution provider, who asked to not be identified to speak frankly, said Dell has made Tech Refresh more compelling for the fiscal year 2022 thanks to new financial incentives.

“For the most part, they just want to ensure that they’re not losing market share of their install base,” they said. “And so they’re just targeting their channel to go after the assets that are due for refresh.”

But financial incentives are one area where the new Power Up program is lacking, according to the executive. Without any margin opportunities specifically tied to Power Up, they said, there isn’t as much as an incentive for partners to upsell or cross-sell into underpenetrated Dell accounts.

“It’s helpful to know where Dell needs the help for [underpenetrated] servers and storage,” the executive said. “We understand what’s in it for Dell. There’s nothing incrementally in it over normal programs for the channel.”

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