7 Critical Points For Solution Providers In Dell EMC's New Distribution Program

Dell EMC Execs Stress Stability, Predictability In Distribution Program

Dell EMC is outlining its plans for distribution partners, and they include consolidating the number of companies the IT giant uses for global distribution.

Other than that, however, the program – run by veteran Dell EMC channel executive Jim DeFoe – is largely unchanged from its current form. DeFoe and Channel Chief John Byrne are set to update Dell EMC distribution partners on specifics of the programs' structure, coverage model and certain policies later this week.

The execs have decided to keep the EMC "no switch" policy instituted last June that prevents solution providers from switching between distributors. When the policy was introduced, it was said to be a temporary measure to help calm anxious EMC solution providers in the run-up to the Dell EMC merger.

In a note to distribution partners, Byrne and DeFoe explain that the "no switch" policy will remain in effect until at least August. Before the merger, EMC worked with Arrow, Avnet and TechData after dumping Ingram Micro in 2015. Dell works with TechData, Ingram and Synnex. Byrne and DeFoe said they will "consolidate" the number of distributors the company works with over the course of the year. Click through for a rundown of Dell EMC's distribution channel strategy.

Not Everyone Gets A Spot

Byrne has hinted recently that Dell EMC would cull its distributor herd, and in a letter to partners, he and DeFoe say they "have determined we will consolidate the list of go-forward distribution partners in FY18." Those who get to remain with Dell EMC are "placing bets on Dell EMC." Those that are cut "will be notified personally, and Dell EMC will work closely with these partners to ensure a smooth transition."

No Switching

In June, legacy EMC solution providers were notified that they would not be allowed to switch distributors through the end of the year. That policy is still in place, and will remain in place until August for Dell EMC's commercial business, and until a data to be determined for the vendor's federal business. EMC put the policy in place to prevent chaos of solution providers scrambling between distributors in an effort to maximize profits before the merger closed.

A Familiar Structure

Overall, the Dell EMC distribution program comes with many of the same requirements as the existing program, including rebates based on qualified sell-through revenue, legacy EMC goal acknowledgement forms and distribution margin programs. The program will also pay out services rebates based on total services revenue generated and provide incentives based on growth among "targeted" resellers in specific lines of business. Distributors will also get "earned" and "proposal-based" MDF.

Reseller Coverage

The majority of legacy Dell and EMC resellers will stay with their existing procurement models based on their legacy Dell or EMC relationships, product lines and regions. Resellers that buy EMC products through distributors, but buy Dell products direct will continue to do so, but any new partners introduced to the Dell EMC program through distribution will purchase through distribution.

Open Vs. Direct

Dell EMC will use the legacy Dell model for deciding whether solution providers are free to work with whichever distributor they please, or if those relationships will be exclusive. As it stands, Dell EMC resellers authorized to purchase client and server solutions direct from the vendor are on an "open distribution" model and can purchase directly from Dell EMC or from a distribution partner of their choice. The same is true for solution providers selling storage products with the exception that deal registration, special pricing and incentives will only be available to partners purchasing directly from Dell EMC. The same goes for resellers currently in a distribution-exclusive relationship.

Protecting Distributor Investment

The program stipulates that the solution providers distributors recruit into the Dell EMC Partner Program will continue their buying relationships with those respective distributors as they advance through the program's ranks unless they're granted a special exception. Dell EMC calls this "distribution incumbency."

Climbing Aboard

As Dell EMC begins rolling out its new unified channel program in early February, the company will start feeding solution provider leads to its authorized distributors. As solution providers apply on the Dell EMC partner web site, the company will review the partner and then send the application to that partner's preferred distributor.