Q&A: Dell Enterprise President Haas Sounds Off On Dell's Revamped Partner Program

Haas Sounds Off

Within days of Dell announcing that 200,000 direct accounts would be pushed to the channel, it has already started the task of parceling out those accounts ahead of the official Feb. 1 kickoff date. How Dell plans on instituting what it calls the biggest change to its channel program in its seven-year history, few people know. But what Dell lacks in the granular details, Marius Haas, chief commercial officer and president of Dell's Enterprise Solutions, makes up for in enthusiasm. Haas, credited for spearheading the channel revamp internally, said changes to Dell's partner program are happening right now and partners need to hop onboard or risk missing the boat. "We spoke with partners and asked them to help us rewrite the rules. Then I went back to my team and said what do we need to do to make this happen? Two weeks later we took the plan to Michael (Dell) and he liked it and 'boom' -- now we have a new program," he said. But, how does Dell plan to roll out its revitalized partner program and what's behind the changes? Haas sat down with CRN and answered some of the questions that have been burning on partners' minds.

What's the new program, its benefits and when does it start?

Starting Feb. 1, Dell will officially move 200,000 previous Dell Direct accounts into the channel, where they will be managed jointly with channel partners and Dell Direct reps. Haas said as many as 500,000 direct accounts could eventually be opened up to the channel over time.

Dell incentives include a 20 percent "compensation accelerator" for the direct sales team to generate new enterprise business with Dell channel partners in seven areas of business: networking, storage, software, security, PowerEdge VRTX, thin client, and workstations. Dell also said it would make a 5X investment in demo and field equipment, as well as a 4X investment in its PartnerAdvantage bonus programs.

Why are these accounts being opened up to channel?

"A rep on average has about 250 accounts. When we did the forensics and analytics we saw that they got 80 percent of their quota on 14 accounts and 100 percent of their quota on 40 accounts. Every single one of them got quota on 40 accounts. So what does that mean? That's 210 accounts left open and unattended to. So, that's not what we want.

We are going through every Dell business segment and trying to understand by account what is our position in that account. We are asking: 'Do we have a well-established relationship with them? What are we selling in them? What is our competitor selling to them and what is our perspective of our current engagement with that account?'

It's clear we didn't have an optimal coverage model in place. So to that what we said -- boom! Let's make sure that we do," said Haas.

What types of accounts are going to be opened up to the channel?

Dell says it will open up primarily mid-market accounts and some lower-end large institution accounts. Dell has described these accounts as "new opportunity" businesses.

"We've got 1,700 large institutions in our segmentation. When we look at how many of those large institutions we are really covering today with some level of effectivity, the number is in the 600 range," Haas said. "So, I've got 1,100 accounts that I want covered in the large institution range. And if I'm not effectively covering them, I want to make sure I've got a partner ecosystem that does.

If you look at the mid-market, that's 297,000 accounts. What percentage do you think we cover there? It's only a small percent. That's when the numbers -- and potential -- starts becoming pretty darn big. If I cover 100 percent of our addressable market, I need to have a very effective program where we collaborate with our partners to go do that," he said.

The Growth Potential

Haas, who said Dell's channel business has been growing by as much as 14 percent year over year, told CRN that the channel revamp could accelerate growth by as much as 25 percent. Earlier this year, CEO Michael Dell (pictured) said 30 percent of its commercial sales are sold through the channel.

"If you look at the part of the market we are not touching and the capacity in our channel, it is a no brainer. I have confidence that we have great line of sight to grow at that rate," Haas said.

Once those accounts open up to the channel, what's the new engagement model?

"We want partners to invest in us, be aggressive, and be pro-active. Our message to the channel is: Don't just sit back and wait. Starting right now, we want to foster engagements and are telling teams to go talk with your partners now and map out sales territories.

We are moving at lightning speed. So -- boom! -- we want partners out into the field now, engaged," Haas said.


When will you have a document that spells out changes and new rules of engagement?

"Those documents are being drafted now and will be done at the local sales level. Dell sales managers are starting their planning activities mapping out territories now. The plan goes into effect Feb. 1, the beginning of our first fiscal quarter.

The reason we announced at Dell World is we are planning activities now so we can launch Q1, Feb. 1. We want discussions to begin now. We want engagement now and for reps to figure out where it makes most sense to co-sell and where it's practical for a partner-led account. We want pre-planning around where we are driving our coverage and get partners participating in those planning activities now. That will go a long way toward helping us document the rules of engagement," said Haas.

Who gets access to large accounts and how is it determined?

Dell said it is working through the details on how it will ensure partners will get mapped appropriately. Partners will have to register any new deals, just as they would in the past. Haas emphasized that there will be no exclusive territories or preferential treatment. And, as always, Dell will preserve customer choice.

"We'll ask what insight do we have in an opportunity? Is it a networking opportunity or a storage opportunity? What do we know? Then we'll say, here's a full-service highly aligned partner. Can we crack that account and be able to go drive new business?" said Haas.

How much more will Dell be investing in the channel and on what?

"We have invested a significant dollar figure to make this program work. Think about it. We are now at five times our seed unit pool for demo equipment to partners. That adds up really quickly.

We also recognize there is clearly an opportunity for us to do a better job on educating our partners on the technology that we are providing our customers and them. So as part of this, yes, we will have a revamp of our training curriculum and our training practices.

We'll do metropolitan road shows, as an example, and pick key cities around the world. We'll go and have a session where we spend a half-day with customers and a half-day with partners. We'll have training sessions on the solutions that we've got. We've done that a number of times and it's been pretty successful. We are going to replicate that and take it around the globe," said Haas.


A lot has been made of changes impacting Dell's culture. Does that present any unique challenges?

"Think about it this way: We just made it easier for someone to hit their numbers. If you're a sales rep with a 20 percent incentive, what is it that you want to do? You want to hit your numbers as quickly as possible. For Dell sales reps, going to market with partners that have the expertise I need, is a no-brainer.

It's real simple. The more at-bats sales reps get the more chances they get to make runs. What we've done is increased the team's total addressable market. They get more at-bats and more chances to make runs. Who doesn't want that?" Haas said.