Dell PartnerDirect Reaches 1-Year Milestone

By Jessica Davis  |  Print this article Print

When Dell announced plans for a formal channel partner program, PartnerDirect, many solution providers and channel observers expressed skepticism. Dell was dropping its evangelical direct-only religion in favor of a more ecumenical approach, designed to give it more leverage against the likes of HP, Lenovo and Acer. A year later, Dell assesses PartnerDirect's wins and losses.

When Dell announced that it planned to offer a formal channel partner program, many solution providers and channel observers expressed skepticism. And who could blame them? Dell built its business on a direct-only model and had called direct sales a "religion."

But somewhere along the way, Dell began to see the value of being more ecumenical in its approach to sales channels. In December 2007, Dell launched its formal channel partner program, PartnerDirect.

And in its inaugural year of offering sales through channel partners, Dell said it expects its revenues through the channel to grow by 33 percent—from $9 billion last fiscal year (when total revenues were $61 billion) to $12 billion this fiscal year.  

Click here for our coverage of Dell's PartnerOne program launch, Dell's selection of Salesforce.com's PRM system and Dell's managed services plans.

The program began with deal registration and plans for several certifications.

"Many of the things that partners have asked for we have launched," Dell Channel Chief Greg Davis tells Channel Insider. "And we continue to grow our partner base and invest in our tools so they can be used on a worldwide basis."

Dell launched PartnerDirect with a deal registration component, considered one of the key components for any company that does both direct and indirect sales. About 15 deals were registered in December 2007. By early May 2008, Dell had approved about $325 million worth of deals through deal registration, and was approving about 80 percent of deals registered.

As more partners have registered for Dell's PartnerDirect program, the percentage of deals approved has fallen. Dell received 5,300 deal registration requests in its fiscal second quarter, which ended in September, and 74 percent of those were approved.

In the first week of December, 71 percent of deals were approved, according to Davis.

"We watch the numbers every week," he says. "Since we've launched the program we've remained at over 70 percent of deals approved."

Davis acknowledges the drop in percent approved, but says it's a function of having more partners register opportunities. "You start to reach a point where there are more opportunities coming in where we had already agreed to work with another solution or we were already going direct."

While Dell has accomplished quite a bit with its PartnerDirect program in the year since the formal launch, not everything has gone according to plan. For example, the company had hoped to launch five certifications in 2008, but ended up launching only three.

"We decided midyear to slow it down," says Davis, adding that the company wanted to be sure to do a proper job on each one rather than rushing them through.

Dell's number of certified PartnerDirect partners has grown to 532, and Davis says certified partners are growing six times as fast as registered partners.

Dell also recently announced a new end-user lease financing program available through channel partners.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com