Dell Enterprise Boss Haas On Growing EMC Accounts, The Cisco Relationship, VMware 'Coordination' And The Company's New Channel Chief

Haas On New Channel Chief, EMC Integration Plans

Dell Enterprise Solutions President Marius Haas, who has built an enterprise dream team that has made the channel the fastest growing business at Dell, spoke with CRN about EMC and Dell partner issues, the Cisco relationship, VMware's independence and other topics as Dell moves closer to finalizing its $62 billion acquisition of EMC and VMware.

Haas's discussion of the largest deal in the history of IT came as the company announced the appointment of John Byrne, a 27-year sales executive, as the new global channel chief. Byrne, a former AMD Chief Sales Officer, came to Dell a year ago as global vice president of sales strategy, operations and channels.

Haas said he is confident that Byrne is going to make sure the combined Dell-EMC will have a "best in class" channel program.

Edited excerpts of the conversation follow.

What is your message to the EMC partners who are concerned about the impact of the integration with Dell?

EMC has roughly 400 key partners around the world that do a lion's share of the business. We are going to have a white glove process for these partners. We want to make sure that they feel they are loved, they are well-incented to go add lines of business and that they grow at the same rates we are seeing within our ecosystem. Within that 400 there are already 60 percent that are Dell partners today. You take the 160 that are left, and we are going to make sure that we take really, really good care of them.

What is your message to EMC partners who are worried that the financial incentives they enjoy under EMC will disappear?

What is important is that every EMC partner knows we are going to protect their accounts and incent our team members to grow the line of business within those accounts with the partners.

If someone says, 'What if the hard deck goes away? Am I now all of a sudden out of my accounts?' No. We are not doing that. If you are in accounts, our objective is grow that account base and expand lines of business in that account base. And we are going to incent our team members to go find new business for you as well.

That is why we are pivoting the compensation on our channel team to go hunt for new business for our partners.

What assurances can you offer to EMC partners working with VCE and Cisco on converged infrastructure, given that Cisco competes with Dell?

Look we have and will have a strong partnership with Cisco going forward. There is a lot of work being done with the whole VCE Vblock architecture where we want that collaboration to exist.

We are going to make sure that our incentive structure and the way we treat our partners is going to give them much more excitement to work with us than NetApp or [Hewlett Packard Enterprise] or any of the other pure play vendors.

What is your promise to Dell partners with regard to the robust backend rebates and co-op market development funds that they have enjoyed to grow the business?

There is a reason why [Dell founder and CEO] Michael [Dell] (pictured) has asked me to go run this. There is a reason why Michael has asked [new Global Channel Chief] John [Byrne] to go run this. We are doing the right things for the partners. We are making sure that they are incented to grow the business and making sure they are making money doing it. The more lines of business they sell, the more successful they are going to be. We are not going to change that. Shame on us if we do something to derail the momentum we have created. The expectation is -- and my commitment is -- we are going to keep driving the core philosophies on how we are going to help our partners grow the business together with us and how we are going to incent our sales makers to work with them and collaborate with them consistently in all segments, in all countries, with a single focused approach that will be the best-in-class channel model in the world in the industry.

What are your channel growth plans?

I will guarantee you that our channel business will grow at a significant premium [compared] to [the] market, guaranteed. It is doing it today. It is our route to market that is most successful and fastest growing both in profitability as well as on revenue. So top-line, bottom-line, it is doing really well. We want to accelerate that. So when you ask the questions about what program elements would logically dominate what the future program could look like, [it would] probably [be] aligned with the programs growing really well.

What kind of synergies will we see with regard to the VMware channel program?

With VMware, what you will see is there will be more influence from our side around what [VMware Executive Vice President of Sales] Maurizio [Carli] (pictured) is doing within the VMware channel programs so that our partners see a Dell Technologies consistency, but they still will have their own channel program.

What benefits do you expect to see with Dell becoming more tightly integrated with VMware?

We have already seen the momentum today much greater than we anticipated over just a very small period of time. For VMware, obviously they are excited about a deeper engagement with Dell around having access to the commercial midmarket space, expanding their reach from that perspective. Our partners have a great selling motion into that space. They have been more focused on the higher-end enterprise accounts. This gives them much more access to the commercial market and a broader TAM (Total Addressable Market). We are excited about enhancing the value of that asset because under the Dell Technologies umbrella, that is a hugely valuable asset.

What kind of autonomy will VMware have to work with other hardware makers?

They will have all the incentives to work with all of the other infrastructure providers because we want them to be the de facto, default virtualization layer across all compute, all storage, all networking, and we want them to be a core architecture standard for our software-defined ecosystems. The only way to do that is allow them to work with HPE, allow them to work with other competitors so that they have that integration and collaboration with them as well. So we'll continue to do that.

We have to let VMware be independent so that they can work with other people, but there will be consistency where it makes sense.

I think the coordination and the consistency on how we make sure we drive value to our partners will be much greater, but there will still be an independent [VMware] program just because they will be a separately traded independent company.

What's your vision for using Dell-EMC's new position as the largest IT company in the world combined with its privately held status to drive channel growth?

The benefit of us going private has already given us is the ability to think long-term. The ability to think about the changes we need to make now to create long-term and sustainable value creation and momentum. We can make changes. We don't sit here and try to nickel-and-dime very quarter to try to hit an [earnings per share] number. We can make changes that we know are for the long-term health and value creation of the business. We can make those decisions. The level of discussion around strategic long-term goals and how we achieve them is ten-fold of what it was when I first got to the company and we were still a publicly held company.

We were on a 90-day sprint every 90 days. Now it is truly about what is the market involvement, what are the macroeconomic trends, what are the macro technology trends, how do we make sure we have our people and our partners aligned best to succeed with our customers.

EMC has a hard deck in the commercial market that designates all but the largest customers as channel accounts. Will we see that hard deck become part of Dell under the single channel program?

There are four areas we are working through in detail. We want to make sure we do it right. Hard deck is one of the four. [The other three are channel terms/conditions, distribution and whether the company deploys a regional or a single global channel organization.] We are in the process of getting an excruciating level of information so that we can drive and protect the current partner ecosystem as well as focus them on how they can open new lines of business in the account base they have, how can we align the incentive structure of our channel people to work with the partners to create demand, do business development work for them to go identify new accounts, to go help get that business versus overlapping with a [Dell account executive]. We want our account execs to work with our partners in the existing installed base, and we want our channel team members to go work with the partners to find new business – acting as the business development ecosystem – and then really incent our partners for that net new business.

If you have a large account with a Dell partner selling servers, an EMC account exec selling high-end storage and Dell account executive selling Chromebooks what is the account planning model?

The account executive will have accountability for everything. They are responsible for developing an account plan that maximizes the sell of all of the portfolio we have into that account. There are going to be areas that we need partners for because they have the relationship and technology expertise and we want to grow that. And there is going to be a Chromebook sale that no one makes any money on. Most of our partners don't want anything to do with it.

The account executive's first responsibility is to build a relationship with the customer so they can help influence the opportunities so more opportunities come our way. They are going to work with a partner to go help close on those opportunities.

The account executive is either going to be an EMC executive or a Dell exec. That is the process we are going to go through account by account by account to say who has got the better relationship in the account, and who is going to be able to influence the opportunities within that account. It might be an EMC [account] exec or a Dell [account] exec.

And there are going to be accounts that are going to be partner-led. We can't cover every darn account. This is part of the planning process.

What is the current state of the Dell channel business?

The channel business for us is on fire. We are still well ahead of plan – growing in every route to market: growing in [distribution] through the roof, growing through the Partner Direct stuff through the roof, way outpacing any of our plans and any of our other routes to market. For anyone putting FUD (fear, uncertainty or doubt) out there saying there is confusion among partners or partners are going to get distracted, it is not showing in the results. And ultimately that is how we measure how things are going.

What progress has Dell made in closing the EMC acquisition?

We are still hoping it is done by October. There is one key milestone in the US which is the [EMC] shareholder vote. There is no opposition forming, no proxy fights forming. We expect smooth sailing.

As for regulatory approvals, we have 21 out of the 22 done, which were closing conditions. China is the last one that is left. So we are just working through the process there. We anticipate everything is on schedule and on time – so prior to October we will close the deal.

What are the cultural differences between the two companies and how that is going to impact the integration?

We actually did a very extensive culture study, and the very interesting part is the cultural traits are a lot more similar than dissimilar. When it comes down to what it is we value, what it is we are focused on: very, very similar.

At the end of the day, the culture is set by who is in charge, and there is no doubt about it: the man in charge is the man who has got the name on the building and that is [Dell founder and CEO] Michael [Dell]. You can ask this question of the EMC people. Look at the level of involvement that Michael has already had in all parts of the organization: he has been to nine of the 10 [EMC] core sites already in person, had town hall sessions at every one of those. The level of engagement he has had and the level of access he has given them is greater than anyone anticipated or expected.

What level of involvement is Michael Dell having on product strategy?

The level of engagement from Michael as to the product strategy, the customer strategy and what we need to do to go win is beyond anyone's wildest dreams. So very quickly people are very much gravitating to Michael as the tenor of the culture and the expectation of it is one team, one goal focused on what do we do best for our customers and our partners.

What are the current market conditions?

It is a tough market. We all know that. It is a take-away market, and in order to win in a take away market that means you have to hustle faster, that means you have to collaborate better, that means you have to create a relationship with customers and partners that is different than the competition.

In a takeaway market, our incentive structure has to be more compelling to our partners than what the competition is offering and that is what we are going to do.

What impact do you expect new Global Channel Chief John Byrne to have on the channel business?

I think what you will see and find is that he is someone that gets into an excruciating level of detail very quickly to make sure that we are [pressing] the right levers that are going to have the largest business results. He is going to do that together with the partners, and he is doing it today for me in running global sales operations and sales strategies -- that level of forensics around how together do we grow the business faster is going to give us the opportunity to run at a speed even faster than we are going today. That is what is so exciting about having John take the helm. Partners will see exactly as John has said – that we are going to be very predictable, very consistent, with a level of specificity and detail that is going to give them the certainty that we are doing the right things. The transparency will absolutely be there.

The margin profile within EMC is larger than within Dell. And if they are excited about the Dell economics, imagine the capacity we will have in leveraging the EMC margin to make sure the programs that we come up with are going to be best-in-class. We want nothing but to grow faster than the competition. In order to do that we need to have programs that are more exciting than the competition. And that is what John is going to be focused on.

What is included in the commercial business that John Byrne will oversee?

Everything that sits within the client business and the enterprise business. RSA sits within it. Virtustream sits within it. There might be a unique set of program elements that RSA has that is tied directly to a security ecosystem, but we would want to start to fold that up under the single channel program.