Dell Inc.'s revamped PartnerDirect channel program adds a Premier partner level in an attempt to help its most productive VARs separate themselves from the pack.
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Top-tier “Premier” partners must meet a minimum annual sales threshold of $750,000 on enterprise products and earn two Dell certifications. These partners will get an additional 2% rebate on qualified products.
And, Dell Premier partners can register as many deals as they want and protect those deals for 180 days, said Paul Shaffer, Dell’s executive director of worldwide channel marketing. Enterprise products include servers, EqualLogic and Compellent storage and networking gear.
Under the new program -- which goes into effect today -- the most productive Premier partners can make 15%, 20% maybe even 25% margin if they play their cards right, Shaffer said.
Dell: Polishing Premier partners
Bernard Westwood, CFO of Syscom Technologies, is fully aboard. “Dell has all these partners and we’re not all the same,” he said. “We’re getting trained in these specific certifications that are important to our company and Dell, so it’s good that they have some differentation in the process now.”
In the existing PartnerDirect program there are registered and higher-level Certified Dell partners. Certified partners got 120 days of deal protection; registered partners got 60.
In the new program, partners with Dell enterprise architecture, managed services, networking and security and systems management certifications will move into either the top Premier level or the Preferred tier.
Westwood and other Dell VARs see six months of deal protection as crucial.
“We put a lot of work into the initial sale and having more time will help us protect that investment,” Westwood said.
Over the years, many VARs that conducted a pre-sales process, building a solution that included hardware, software and services complained that Dell often undercut them by offering the software and other perks for free in order to secure the hardware business. The expanded deal registration system could curb that behavior, VARs said.
Peter Kennedy, founding partner and chairman of New York-based Kraft & Kennedy Inc.,said the program gives lower-tier partners incentive to rise up in the ranks and could ease the channel conflict that has afflicted Dell’s partner relationship for years.
“It’s an evolutionary change as the Dell channel structure has grown over the years,” Kennedy said. “The Dell direct sales force will recognize Premier partners and make more of a point to work with us.”
Preferred partners will need to log $200,000 in enterprise product revenue and get one Dell certification. Dell will also give Preferred partners 180 days on storage deal registration, 120 days for all other deals. They can register up to 50 deals per year. Registered partner benefits will remain the same, including 60 days to register up to 10 deals.
Syscom Technologies has Dell server, storage and systems management certifications, but may pursue others.
“We’ll keep an eye on cloud certifications. We haven’t seen any proof that the cloud brings in money but it’s something that’s potentially interesting to us,” Westwood said.
Dell claims about 20,000 registered partners now and more than 800 certified partners in North America. Shaffer expects about 15% of certified partners to advance to the Premier level. They have till the end of the year to get the required certifications.
“We’re not taking anything away from existing Dell partners, but we wanted to reward partners that have two certifications,” Shaffer said.
Steve Hipskind, president of Hipskind Inc., said Dell is finally listening to partners.
“The [time added for] deal registration is huge because Dell finally understands individual partner strategies,” Hipskind said. “They’re uncomplicating the channel for us and now we can work with customers on their schedule.”
“Being a Premier partner will also have an impact on competition with other partners because it will help us give the customer confidence that we can deliver that specific Dell solution for them,” he said.
This PartnerDirect news comes at a time when Dell is earning some praise even from long-time critics in the channel for launching and sticking to a consistent and coherent channel strategy.
Channel conflict dies hard
But many VARs still want to see more from Dell and Shaffer acknowledged that while the company is pleased with its channel progress, it has “to overcome a lot of resentment which is probably justified.”
One New England area VAR said Dell’s claims of approving more than 70% of partner-registered deals don’t jibe with his experience. The actual approval rate is more like 50%, he said. “We get a lot of pushback.”
But the tweaked PartnerDirect program set up is definitely better than the [current Dell partner levels], especially now that we’ll have 180 days instead of 30 for deal registration,” said Hal Brumfield, founder and president of Houston-based BResource. “I feel like whenever we’re working on a deal, it’s always expiring on us.”
Brumfield said he still has to fight off the Dell direct sales team on certain deals, though, and would prefer that Dell would allow its partners to register their clients and be the single point of contact.
“There was a situation where we had a Dell SAN and EqualLogic deal in place, but the customer held off to check pricing, and we ended up losing the deal to direct sales,” Brumfield said. “We're now fighting to re-register the deal. The problems are easy to fix – everything our client orders should go through us.”