Just two short months after Dell Inc. and its channel partners celebrated the relaunch of Dell's private company status at Dell World 2013 in December, the vendor's executive channel team reported that it's in full swing, operationalizing a slew of partner initiatives, learning how to partner better, and taking some serious steps to improve sales engagement.
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In a meeting last week at SearchITChannel headquarters in Newton, Mass., Dell channel chief Cheryl Cook, vice president and general manager of the company's global commercial channel; Frank Vitagliano, vice president of North America channel sales at Dell; and Bob Skelley, executive director of global channel marketing and partner programs, talked about what the vendor's channel team has been up to since Dell World 2013, as well as opportunities and challenges on the radar.
Partners we spoke with following the meeting also chimed in on some issues and recent changes they've seen in their Dell partner relationship.
Cook addressed the steps the company has taken to meet some of the partner initiatives that were announced on Day 1 of Dell World 2013 and that were slated to take effect in North America on Feb. 1, the start of the company's new fiscal year. Some of those initiatives included creating more alignment between the company's direct and indirect sales forces by combining the sales organizations and adding a "compensation accelerator" to incent Dell's direct team to work with channel partners; expanding profit and coverage opportunities for the channel; identifying named accounts to be channel-led; and growing channel business above the industry's average rates.
"They're ready and poised … to take effect the beginning on Q1," Cook said.
Partner initiatives slated to roll out include Dell's new model for compensation, education and training. Vitagliano and his team, in partnership with Dell's direct sales leadership, have been defining coverage plans -- direct, indirect and co-selling -- at a segment level; those plans are expected to be finalized in a week or so.
The 20% compensation accelerator for Dell's sales teams was actually launched in the fourth quarter of 2013 to get things going, according to Skelley. The channel executives also pointed out that at this year's upcoming sales kickoff on Feb. 10, Dell will incent its sales team to go after higher-margin, solution-oriented customer opportunities.
"The day we left Dell World we began to operationalize these things because there's a great opportunity for us to partner better," Vitagliano said.
In particular, he was referring to improving how the partner teams and direct teams work together, as urged by partners. Dell partners generate about 30% of the company revenue.
Today, Vitagliano said, the indirect and direct channels are one team. Just prior to Dell World 2013, the vendor made a strategic organizational move to eliminate the sales channel silos that reported up through separate organizations and were compensated and measured that way. The company integrated the channel teams from each of the regions and integrated them with the direct teams.
Dell partner perspective
At Georgia Technologies Corp., a managed services provider (MSP) and Dell partner since 1999 located in Statesboro, Ga., 90% of the hardware the company sells is from Dell. That's because Georgia Technologies has been satisfied with the products and the company, according to David Rogers, chief operating officer at Georgia Technologies.
Satisfied for the most part, that is. "We've had different account reps over the years and also dealt with the Dell team -- which was never my personal favorite -- but recently we got a dedicated sales rep, and we're very pleased," Rogers said.
The restructuring of the Dell account managers works for Rogers.
Georgia Technologies now has a quick communications loop with Dell. For instance, Dell's account manager returns calls within 10 to 15 minutes. That's a change from dealing with a Dell team made up of three or four account managers that weren't as responsive to his business, Rogers said. "Sometimes it was painful," he said.
According to Derrick Davila, corporate vendor relationship manager at Mindshift Technologies Inc., an MSP and cloud services provider with headquarters in Waltham, Mass., Dell is about to change the reps at his company. Davila said Mindshift received an email this week that stated it will get a new inside channel team with two new reps.
While Davila didn't know any more about the change, he said that if it means faster response times from Dell, then it's a welcome change. Dell is the company's No. 1 go-to vendor partner for desktops and servers.
"We're a challenging partner in that sometimes our sales reps expect faster response times from Dell on customer inquiries," he said. However, he added that Dell meets or sometimes exceeds its service-level agreements, but some of his Mindshift reps want a call returned in 15 minutes, and if they don't get it, they're not happy.
A more predictable Dell
As Dell aligns its direct and indirect teams, the move puts Vitagliano and Jim DeFoe, vice president of global commercial channel sales and programs at Dell, at the table with the company's sales leaders.
"We all sit together at a table and address how to do a better job growing Dell's business. Not growing Dell's channel business or Dell's direct business, but to grow Dell's business -- and a part of that is how we do jointly," Vitagliano said.
This integrated strategy allows Dell to take the next steps in its natural evolution, the Dell execs said. That next step is harnessing partners and their capabilities to sell the vendor's expanded portfolio in a market that has grown in size and complexity, according to Cook.
"Having an integrated direct/indirect go-to-market and coverage strategy gives us a conscious holistic approach where I can give our partners more predictability on where I'm going to invest resources, where we want to co-sell, and, candidly, I don't think we were that predictable before," she said.
It also sets a new tone in the larger Dell organization. "It gets the traditional sales team to realize that there are additional sales resources that they can use to help solve customer problems," Vitagliano said.
Impact of IBM's x86 server business to Lenovo
Whether Dell's more integrated sales strategy will help the company take on Lenovo -- the sale of IBM's x86 low-end server business to Lenovo was announced on Jan. 23 -- is yet to be seen. Dell channel execs see the sale to Lenovo as a big opportunity for Dell and its partners.
"We have positive momentum in our indirect channel business in general. Dell is growing at approximately 3X the pace of the market. In our server business specifically -- the business that Lenovo is acquiring from IBM -- we have tremendous momentum and have been taking market share," Cook said. She noted that Dell is No. 1 in the x86 server business in Asia, the Americas and Latin America, but not quite in EMEA.
"We're actually receiving calls from Lenovo partners," Cook said. She explained that these partners feel that their value proposition to their customers and their business models revolve around more sophisticated hardware and software systems that are integrated to work together. And if Lenovo's x86 server business, assuming the sale is completed, is about a hardware resell model, these partners are questioning if it changes the image for them.
Dell's job? To have a swift and positive response to compelling industry events such as this one. Cook said the company has to make sure it has an attractive partner program that people would explore and entertain, and Dell welcomes Lenovo partners interested in exploring its partner program and growing with Dell.
Some of these partners may even be current Dell partners, given that partners often have at least two server vendor relationships.
"When some of these partners step back and think about where they want to go, we have a wonderful opportunity to articulate to them our end-to-end solutions and technology strategy and have a discussion about if you're selling servers into a data center, for example, and there's clearly an opportunity for storage, networking and infrastructure, etc., I think we're a pretty good partner," Vitagliano said.
The invitation to join forces with Dell is also extended to existing IBM customers who may be wondering if the x86 server path with Lenovo is the roadmap that's right for them.
How to get the Lenovo message out to current Dell partners?
The Dell channel executives believe the company's existing partners already get it. Still, Cook said it's an opportunity to educate both existing partners and potential new partners, and also enhance and exploit Dell's position as an end-to-end systems company.
"If you look at the trends in the marketplace around converged infrastructure, if you look at the trends in the marketplace around how to counsel customers through this journey of private, hybrid and public cloud deployments, and how to manage them, how to position those -- the breadth of solutions in Dell's portfolio right now is unmatched with what Lenovo's arsenal will be when they bring that business into what they're doing," Cook said.
The channel chief sees this as a differentiator for getting partners into Dell's partner program -- which she views as underpenetrated and underserved in the partner marketplace given how Dell has grown its channel and how it acquires its capabilities.
"So if partners are looking for options, and I look at how many partners are subscribed in a Cisco, NetApp, EMC ecosystem versus where we are, I think we offer headroom and opportunity for partners not to be in that competitive environment and offer good robust solutions and invest where they can get a pretty good return," Cook said.
That message is all well and good, however, Dell partner Georgia Technologies recently signed up for the Lenovo partner program.
"We don't have a lot of information, but I want to see what being a Lenovo partner entails," said Rogers, who added that it would take a lot for his company to leave Dell. "Someone would have to mess up big time," he said.
Dell is the company's top hardware partner for desktops, laptops and servers, as well as for Sonicwall products. Georgia Technologies will sell IBM or Hewlett-Packard servers to accounts, such as government, when specifically requested, which happens infrequently, he said.
Interestingly enough, Rogers said that recently more customers are inquiring about Lenovo products -- he can't explain the timing except to think that these small- and medium-sized businesses are being targeted with Lenovo marketing. In some cases, new customers already have Lenovo tablets. "I've called Lenovo and got good support, and their server products are on par with Dell," he said.