At the Microsoft Worldwide Partner Conference 2013 last week in Houston, SearchITChannel caught up with Frank Vitagliano, Dell's vice president for North America channel sales; Russell Fujioka, global vice president of alliances, partners and marketing innovation; and Mary Catherine Wilson, director of Americas marketing and programs with the global commercial channels. The conversation centered on what's ahead this year for the company's 3,500 active partners and issues around melding the partner programs from the many acquisitions that Dell has made over the past several years.
Just passing Day 90 of his tenure at Dell, Vitagliano summed up his initial days at the company as a time to meet one-to-one with several dozen partners to understand their businesses and their experience with the Dell partner program and to learn about what's working, what needs improvement and how to continue the growth.
What are your goals for this year?
Frank Vitagliano: The good news is that we've built a good foundation in the five years that we've been working with partners. Our partners tell us that the basics of our program -- i.e., deal registration, training, enablement, channel marketing, support, sales operations -- are working pretty well.
We're very cognizant of making sure that our growth in the channel isn't at the sacrifice of our direct business.
global vice president of alliances, partners and marketing innovation, Dell Inc.
There are two key areas that partners tell us we need to work on:
First -- and one of the reasons I came to Dell -- is the overall acquisition strategy and putting all the pieces together to have an end-to-end solution that we didn't have but need to have. What we need to do a better job at is integrating all of it -- i.e., the processes, such as a single ordering system, and unifying the various management systems. We're at the stage now where in order to really leverage the acquisitions, we have to do the integration work.
The second area of focus is our sales engagement in the field between the Dell teams and the channel teams. It's not as consistent as we want it to be.
In my experience, when it works the best, the channel partners and our field sales teams work together prior to an engagement to define where the opportunities are, mapping accounts and figuring out who's got the relationships, and figuring out who did business with that customer previously. In other words, having a joint plan.
When that doesn't get done, it doesn't work out as well. So, for us, it's a bit of a new motion -- and we keep getting better at it. If you do some basic things and it begins with communication, you can avoid a lot of conflict.
What about integrating the Dell partner programs from the various company acquisitions? How big a challenge has this been? Or are you keeping the channels separate?
Vitagliano: We're integrating them. It's a challenge but not insurmountable. Most of the companies were 100% indirect channel. In September, for example, we integrated the software programs into the overall construct of our channel programs. A lot of these companies used distribution quite extensively, so I met with all the distributors, and we have a strategy to integrate that.
What I want is for them to look at us as one Dell versus the Dell server business, the Dell client business, the Sonic Wall business, the Wyse business, etc. That's the first piece. Partners would tell you we're making good progress there, but we have to continue.
Russell Fujioka: I think … when you acquire someone like Wyse or Quest, AppAssure and SonicWall, all within about 14 months, there are partners who overlap; there's different contracts that you're dealing with. So the ability to train on the overarching strategy and also have some account control and go to market is the challenge going forward.
What is Dell doing to help partners get comfortable telling the company's end-to-end story?
Vitagliano: That's where the training and partner enablement come in. We trained thousands of partners last year, some on point products, but a lot of the training was on Dell: how we go to market and how to leverage what we've got.
What about education and competencies?
Vitagliano: There's a major focus on our software competencies -- back in April we enhanced our PartnerDirect program by converging our software competencies and the training associated with that into our overall partner program. The software piece was missing from our program.
The reason that this is so critical is because -- and I've only met some of our partners, such as the Quest and SonicWall guys -- [they asked], 'How do we take advantage of the bigger Dell?' In other words, there were certain things that they like in the channel model they came from (100% channel, worked with distributors). They don't want to lose that, and we're not going to let them lose that.
More on the Dell partner program
Channel chief Greg Davis on the challenges of acquisition
Michael Dell's plans for the channel
News from Partner Day at Dell Storage Forum 2012
Dell's channel growth in Europe
The other piece of it is that they want to be able to leverage the bigger, broader Dell because they all have customers in the data center: someone who is buying someone's server, someone's client product, someone's storage. They can't do that unless we start integrating the partner programs.
Mary Catherine Wilson: The competency base that we've been able to evolve this past year provides different routes to protect the partners. So if they want to specialize and it's not in their business model to sell across our end-to-end solution, there are routes within certification to add specializations in hardware or software.
We continue to add competencies and we allow for flexibility to meet the partner's different business models.
Fujioka: Some of the training that Dell is putting together is many times ahead of the curve for Dell. One example is our launch in June 2013 of Dell PowerEdge VRTX. It's basically the size of a roll-on suitcase but basically a full data center. The outreach that we had prior to the launch and through the launch is working with our partners -- channel partners, alliance partners, OEMs and ISVs [independent software vendors] -- to develop vertically oriented and workload-optimized solutions. VRTX is a highly anticipated release and is a very exciting product for the channel.
Today, 36% of Dell's global commercial revenue is partner-driven. Does Dell have a target figure for how much business goes through the channel?
Vitagliano: No, and let me explain that. The idea was to ensure that we had a set of routes to market that make sense for how our customers want to buy. The worse thing that you can do if that's your strategy -- and I think it's the right strategy -- is to dictate how much should go and in what direction. You've got to be in the routes that customers are utilizing.
Now, from an industry standpoint, the numbers are significantly higher -- about 65% to 70% of everything that gets sold is through partners. So what we needed to do is open up this route to market and then, as we progress … [it will continue] to evolve. We don't think that it makes sense to set a target or number, because then what happens is that you start to do unnatural things that in the end don't satisfy the customers. We want to be where our customers want to buy.
Fujioka: We definitely have a multichannel approach to how we deliver and service product. We have growth targets for all our routes to market. We're very cognizant of making sure that our growth in the channel isn't at the sacrifice of our direct business. There's not a purposeful shift of business from our direct model to our channel model. We want to continue our multichannel approach to make sure that each channel has the right things happening at the right time, guiding opportunities each way.
Are any accounts off-limits to Dell partners?
Vitagliano: We have a deal registration process. Traditionally, some accounts were direct and our view on that is, as long as the customers are satisfied with this route, we'll maintain it. If there's a scenario where it's in both our interests, particularly in the customer's interest, we'll work with a partner.