Dell EMC Channel Unification Effort Gets Under Way

Dell EMC today formally rolled out a unified channel program, under which partners will receive extra rewards for helping the company gain new market share starting later this month.

The primary goal is to provide incentives that reward partners for helping Dell EMC increase market share in enterprise IT infrastructure deals—an area where Dell EMC thinks it is not gaining its fair share, said John Byrne, Dell channel chief. “We’ve said all along that this is about increasing our share of the customer wallet,” he said.

To achieve that goal, the Dell EMC channel program adds eight points of margin for partners that land new storage and server accounts.

However, the new Dell EMC channel program is clearly weighted to reward partners more generously for selling the company’s products across multiple categories. As such, Byrne said he would not be surprised to see a wave of merger and acquisition activity across the Dell EMC channel, as partners begin to realize they will be much more profitable if they have expertise in multiple disciplines.

Nevertheless, Dell EMC has included provisions in its program that make it easier for smaller partners to participate at higher levels of the channel program if they sell Dell EMC technologies exclusively.

“We were pleasantly surprised by that,” said Sonia St. Charles, CEO of the Davenport Group. “We think there is a huge opportunity for Dell EMC in the market.”

Four Tiers in the Dell EMC Channel Program

In all, there are four tiers in the Dell EMC program spanning Gold, Platinum, Titanium and Titanium Black at the highest level. The Titanium Black is an invitation-only tier that requires sponsoring by Dell EMC executives and approvals all the way up to CEO Michael Dell, Byrne explained.

He added that the real place partners can make money will be selling Dell EMC services. Instead of rewarding partners for selling services as a percentage of the service revenue, Byrne said partners will be given an additional point based on the total value of the deal.

“We think that’s pretty unique,” said Byrne. “That’s where we think partners will find the pot of gold.”

One other aspect of the program that was not previously disclosed involves providing partners with access to an online calculator that allows each partner to know exactly how much profit it is generating on a weekly basis. Previously, Byrne said, the company lacked the ability to implement that level of account automation. But now that Dell EMC has committed to changing elements of its channel program every quarter, it’s now feasible to provide partners with more financial visibility, he explained.

Dell EMC is also increasing the total amount of money it makes available to partners via market development funds (MDF) by eight percent. A much larger percentage of those dollars will be tied to specific proposals.

Finally, Byrne said that Dell EMC has clarified the no-tolerance policy it is implementing. The first time a Dell sales representative poaches a deal registered by a partner, the company will assume it was a mistake, and the sales representative will not be compensated. The second occurrence will be grounds for termination, he said.

There’s no doubt that the channel is pivotal to Dell EMC’s ability to deliver a return on investment on the largest merger in the history of the IT industry. The goal is to turn all that potential into tangible gains in market share at the expense of rivals that are not strangers to the channel.