Dell launches partner program, will continue factory integration model

Dell's crawl toward the channel has culminated in the announcement of a new partner program, Dell PartnerDirect, but Dell will continue to custom-build hardware for customers.

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Dell yesterday announced a new partner program that formalizes existing relationships with partners and adds new benefits, including short-term financing, a partner Web site and online deal registration.

The program, Dell PartnerDirect, marks a major shift in strategy for Dell, which was founded as a direct sales vendor and has used that approach to become a leader in the personal computer and server markets. Executives yesterday said the Dell partner program will help the company reach new customers and make more money for partners.

Dell will continue with its SKU-free sales model and keep building customized hardware for customers, said Greg Davis, channel vice president and general manager for the Americas. Building custom systems in the factory, rather than relying on resellers or integrators, "can eliminate a lot of costs for [partners] and help them to become more profitable," he said.

Despite Dell's reputation in direct sales, the company has 30,000 partners -- including 15,000 in the United States -- who resell its products and services. That channel has generated $9 billion in global revenue during the last year, according to Josh Claman, channel vice president and general manager for Europe, Middle East and Asia.

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"We think we have a good start," Claman said. "We have a good baseline for business. We need to develop formal channel programs that are much more robust."

The Dell partner program has three broad goals: to certify thousands of partners in at least one of six practice areas, to increase its registered partner base and to grow its business from partners faster than the company average. Over the last three years, Dell's partner business has experienced 16% compound growth, which is more than the company average, Davis said.

New features of Dell's partner program include 30- and 45-day credit terms, logos and other marketing materials, and a partner Web site for online ordering, technical support and training. Partners can register deals as well and have up to 120 days to close the deals.

In the eight business days since Dell launched its pilot deal registration program with 24 partners, 17 deals for $3.8 million were registered, Davis said. And to reduce vendor-partner conflicts, Dell will now compensate its direct sales staff regardless of whether an order originated in the channel.

The level of benefits that partners receive depends on whether they are registered or certified partners. Registered partners must be established hardware or software resellers or service providers. Certified partners must also meet specific practice area requirements, have the appropriate third-party certifications, submit to a review of their business processes and demonstrate knowledge of Dell products and services.

Dell has so far announced two of its six certification paths: managed services and enterprise architecture. The company chose managed services because it is a growing field with opportunities for partners to earn high margins and increase their revenue, said Dan Phillips, global director of channel services.

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