With company privatization and Dell World 2013 in its rear view mirror, Dell Inc. is seeing momentum in the market as an indication that its overall messaging has been getting positive and is resonating with the partner community.
Dell has seen an uptick in new partner enrollments, deal registration, and partner certification and training from the fourth fiscal quarter of 2013 (ended Feb. 1) to the first quarter of 2014 (ended May 3), according to Cheryl Cook, vice president of global channels alliances at Dell.
"Decisions the company made around aligning our channel sales force with our end user sales force is reflecting in the overall engagement with partners," she said. Other numbers reveal health, traction and momentum in the business overall, she said.
That doesn't mean that the worldwide channel chief is unaware of the challenges Dell continues to have with its partners.
"The progress we've made in our engagements and the organizational moves we made to align our channel sales and direct sales appears to be being met with receptivity," said Cook. "We're at the front line and at the point of truth in front of customers with common sales leadership and executive leadership to try to ensure that should we have conflict, it's resolved [in a] timely [way], with velocity and purpose to make sure that right outcome of coverage and the right outcome for our customer happens," she added.
To encourage its direct sales team to align with its partner ecosystem around its enterprise offerings, Dell offers its direct salespeople a 20% compensation "accelerator" when they help a Dell partner sell PowerEdge VRTX, storage, networking, software, thin client, workstations and SecureWorks products to a new customer.
Citing recent business numbers, Cook addressed Dell PartnerDirect.
Current enrollment in Dell PartnerDirect is 165,000 worldwide. The company's managed partners -- premier and preferred -- total 3,500 worldwide, with 1,587 of those partners in North America. Premier and preferred partners are those that are more invested and aligned with the vendor compared with other partners. The number of all registered partners reflects an annual increase of 26%, with double-digit growth across all partner types, according to Cook, and across all categories (for example, end user business, software and enterprise business).
Software, in particular, is an area that Dell wants to grow with partners. To that point, the number of Dell partners actively seeing certification to sell more complex solutions, including software, has expanded, with certification up 62% quarter over quarter, Cook said. The numbers of partners in PartnerDirect realizing revenue around these solutions is up 5% year on year, according to Cook, who noted that more complex sales have a longer sales cycle.
"What this tells me is that partners are finding these solutions synergistic to their business practices to attach complementary offers such as our data protection software or security offerings around the technologies," she said.
The number of Dell partners taking software-related training courses increased by 126% from the fourth quarter to the first quarter. Software-related training classes were launched last September. Partners must take these courses to achieve premier or preferred status in PartnerDirect.
Rebate payout to Dell partners is up 42% year over year.
Momentum in the business overall -- in both direct and indirect sales -- has also been positive. On the indirect side, Cook said that where the company was growing two to three times faster than competitors in the fourth quarter, the latest figures indicate that the company is running at twice that pace.
Dell is also expanding its distribution channels, according to Cook, and distribution growth has tripled and is upward of 125%. Dell's move to expand into distribution falls to Frank Vitagliano, the new global vice president of channel strategy and programs. Before that, Vitagliano was vice president of North American channels at Dell. He is also responsible for working with Cook on Dell's overall channel strategy as well as the PartnerDirect program.
Deal registration worldwide, according to Cook, is also up, with 87,000 deals registered (including 33,530 in North America), reflecting a 22% quarter-on-quarter increase. Software deal registrations are up 55% quarter on quarter. Approval ratings for all registered deals remained steady at about 72%, she added.
The vendor would like to see stronger partner participation in and results from its storage business. "We feel the opportunity is significant for Dell and our partners, particularly around our innovations in flash technology," Cook said.
If Dell, like HP, hopes to get the attention of IBM x86 partners that may be assessing their vendor partner options once the sale of the IBM group closes with Lenovo, it definitely needs to clear up any negative perceptions that are out there in the partner community.
Cook believes that the 20% premium compensation accelerator to its direct sales team to work with Dell partners, its position in the server market, its enablement efforts and recent increase in deal registration is positive stuff for potential IBM partners looking to join PartnerDirect.
Having 30-year IBM veteran Vitagliano and the relationships he has in the IBM channel community have big strategic significance for Dell as it reaches out into that ecosystem.
Like HP and Lenovo, Dell also has a Day 1 strategy to onboard IBM partners once the Lenovo deal is closed, including making sure new partners are aligned and engaged at the highest level of PartnerDirect from the get-go, according to Cook.