Dell to Create Formal Channel Program

By Jessica Davis  |  Print this article Print

The company that created the direct-only sales model says it will announce a channel partner program by year's end.

Dell has announced plans to take the wraps off a formal channel partner program, complete with deal registration, by the end of 2007.

The PC maker has given the go-ahead for partners to describe themselves as "Dell-authorized partners" and has begun allowing partners in its Public Sector sales group to register deals, but more formal programs are on the way, said Chris Bates, director of Dell's Solution Provider Direct program— one of four groups that is participating in the company's previously less-than-visible channel program. A financing program for partners is also in the works, he said.

Dell is no stranger to the channel, as it sells some $4 billion of products a year through U.S. partners, according to Bates, but the operation had been clandestine.

The company, based in Round Rock, Texas, is embracing a more formal relationship with partners because it is what customers need and want, as they seek to simplify their IT operations and work with solution providers as their "trusted advisors" in that capacity, Bates said.

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"At a high level, we are talking about the evolution of the direct model to better serve customers and to help channel partners better serve their customers," Bates said. "This isn't a new focus for Dell. [The channel] makes up $4 billion of revenue in the United States."

Michael Dell, the company's founder and CEO, was the first to hint at a channel program, declaring in an April 25 memo to 78,000 employees that the direct model the company championed was a "revolution, not religion" and the company would take whichever route to market best served customers.

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Dell's Solution Provider Direct program, which allows VARs to resell the product at a discount, consists of four sales organizations within the company, based on end-customer focus. Bates' group focuses on the commercial sector, including SMBs (small and midsize businesses) and enterprises.

A second group, called Global Alliances, works with the top 20 companies Dell deals with, such as Electronic Data Systems. A third group, the Industries Solution Group, focuses on customized OEM solutions such as special product builds, allowing Dell to customize solutions. A fourth group focuses on the "public" area, including schools, local government and large government

All four of these groups sell both through channel partners and directly, Bates said. And while Dell has been selling through the channel in these organizations for "several years," Dell has recently stepped up investment in the channel portion of the organizations, investing "millions" of dollars in a channel support sales staff over the last year to support "thousands" of partners. Bates declined to be more specific.

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Dell does not have a channel chief to head up the channel initiatives of all four organizations, and Bates declined to speculate on whether the company would create such a role. Furthermore, Dell has not settled on the components of its formal channel program, or at least is not telling what they are.

And while moves within the company to embrace the channel appear to be aggressive, Bates declined to say whether Dell is actively recruiting new partners and whether the company has a goal in terms of partner numbers.

Dell has recently conducted focus groups of partners in Los Angeles, Chicago and New York City to get feedback on what they want in a partner program and to provide training and additional insight into Dell's future plans in terms of the company's channel development.

"We've said we have been willing to meet with customers that add value," he said.

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