Dell and EMC merger update: A Q&A with Dell's channel chief

Cheryl Cook, Dell's channel chief, discusses the challenges and opportunities in Dell's pending acquisition of EMC, which is expected to close by late summer.

For Dell and EMC channel partners anxious about the merger of the two companies, which is expected to transpire by late summer, today's announcement of the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 represents another step forward in the proposed merger. Dell announced its bid for EMC in October 2015.

According to Dell channel chief Cheryl Cook, today's news of clearance to proceed by the U.S. Federal Trade Commission is energizing, and the company has had two dedicated integration teams working together as the acquisition moves forward. "Partners are also excited as we look to see where we can bring the two partner programs together, and where we can add value and realize a richer enterprise experience with our customers and our joint customers with the combined companies," Cook said in a Q&A with SearchITChannel.

While Cook answered some questions about the upcoming Dell-EMC merger, she also discussed some partner initiatives that were announced at Dell World 2015 and went into effect earlier this month, as well as a partner progress update.

Anything you can talk about today about the upcoming merger of the Dell and EMC channels, and what partners can expect?

Cheryl Cook: We still have the work ahead of us to understand how much overlap we have in our partner community today -- and we have some. We had a partner day at Dell World [2015]. And if I use that as an informal sampling,  we had about 1,200 partners in the room and we asked them for a show of hands how many were also EMC [and] VMware partners, and about two-thirds of them raised their hands.

So, I think it will create an opportunity in both ways ... Dell partners who are not EMC partners, and EMC partners who are not Dell partners ... I'm getting a lot of inquiries with them trying to get educated and understand where they're going. If you look at where EMC is from a sales and relationship perspective, they have exceptional relationships with the top 2,000 customers -- and a lot of that is served by partners. And if you look at Dell, we have tremendous reach and capability in the midmarket and small business, so I think we're going to find a lot of synergies and complementary sources with skills with our sales organization and our partner ecosystem go to market.

What about the inevitable disruption for Dell and EMC partners with the acquisition?

We understand that it's a change for partners, and that there has to be an awareness and understanding from a partner program perspective.
Cheryl Cookvice president of global channels and alliances at Dell

Cook: We understand that it's a change for partners, and that there has to be an awareness and understanding from a partner program perspective. But at least from a philosophy perspective and what we always aimed at doing ... if you look at the fact that Dell has had over 20 acquisitions in the last four to five years -- with many of those companies being primarily channel-led, while not as large as this transaction -- the goal has been and will continue to be to look at the attributes and characteristics of the programs, look at how we try and take the best of the best, and continue to evolve our program with those things that are uniquely valuable and differentiated by the partner community.

So, we have work ahead, but it will be with that spirit as we navigate. The EMC partner community serves their customers very well, and we want to make sure that we maintain all the positive attributes of that while bringing it into our simplified program.

Cook provided a quarterly update on the company and its partners, some of which is noted here:

Cook: We're still seeing positive growth in the channel, which we characterize by three times [to] four times the market, and we're still seeing that pace of growth.

We're seeing positive response to our deal registration, pace and volume, which we view as a proxy of engagement with our channel. Deal registration in North America is up 28% year on year, or 3,400 deals registered in Q4, and is up 19% year on year globally, or 94,000 deals registered in Q4. These figures represent a growth of roughly 50% payout of rebates year over year in [North America] alone.

Over 42% of our acquisition business is going through the channel in Q4. So, in [North America], we have a dedicated sales segment that's just doing new business and new logos. Within that territory, roughly 42% of that business is channel. Globally, it's also over 40%.

We're continuing to want to orient and focus the opportunity with our partners to help us expand line-of-business expansions within given accounts, and also help us grow new business and new logos.

We had a greenfield program, which is essentially a list of customers to pursue, which is new business, and we've see 60% growth in greenfield bonuses for our enterprise partners. So, the program is achieving what we hoped it does, [that is] getting us new customers, but it's also achieving higher payouts to partners in the U.S.

Dell's top 100 partners invested in new training for reps -- which was up by 24% -- and these partners saw revenue increase by 16% year over year.

New programs launch in February 2016

Cook: We're now launching some programs that were announced at Dell World 2015, such as new business incentives and new rebate incentives in [North America], which creates a richer opportunity for our Preferred and Premier partner community. We usually target our Premier and Preferred partners, so our February announcement gives an opportunity to our lower-level partners, which we hope will be well-received.

We also added rather lucrative opportunities for storage and networking new business for those partners, up to 15% rebates for new business incentives for these lines of business.

We're also going to begin monitoring partners who take advantage of the launch of new service opportunities and offerings, and the option for partners to get authorized to do deployment services. They can get certified with ProDeploy Enterprise Suite, and it really gives them the opportunity to participate from a revenue and margins perspective, but it also creates the opportunity to have a stickier relationship and ownership with their customers.

So, it's not just selling the services, but it's delivering them as well.

Other news

Cook also noted the company has certified Ingram Micro to sell Dell Software in the federal market.

Dell also in February reorganized its sales field organization in North America, which Cook said she hopes will benefit the partner community and make it easier for partners to engage with Dell. The company moved to a geographic organizational structure in the U.S. from a previous program based on customer segments. There are three vice presidents: one for East, one for West and one for Central. There's also a new vice president who focuses solely on new business acquisition.

Next Steps

Read an opinion piece on the Dell and EMC merger, and its implications

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Learn about the Dell-EMC deal's potential impact on VMware

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