Building on the momentum it gathered following its
acquisition of EqualLogic and Compellent, Dell is squarely setting its sights on
becoming the top-selling storage vendor through the channel, executives told
attendees at this week’s Storage Forum 2011 in Orlando. Dell unveiled
a formal indirect program in late 2007, when company founder and CEO Michael
Dell announced the business would no longer abide solely to the direct model
that had led to its early success.

Today, Dell’s overall channel business represents a
growing segment within the $61.5-billion
corporation, said Bob Skelley, global director, enterprise architecture
channel. Today, 29 percent of the company’s commercial revenue comes from the
channel, he said. In February 2010, Dell’s indirect commercial revenue
contributed 26 percent of the most recent quarter’s revenue, Greg Davis,
general manager of Dell Americas Channel Group, told Channel
at the time.

“If you took our channel business and separated it out as
a standalone business, it would be number 350 on the Fortune 500 list,” said
Skelley, this week. “And so it’s really been a great journey over the past four
years. It really is, I think, the most exciting place to be in Dell right now.”

Although some, perhaps many, EqualLogic
and Compellent VARs were worried about their organizations’ future and skeptical
about Dell’s commitment to the channel when the much larger vendor acquired the
storage-specialized developers, numerous attendees voiced satisfaction with
Dell’s handling, to date. Dell purchased EqualLogic about four years ago, and
many solution providers are satisfied with Dell’s integration of the smaller
vendor’s channel-program elements, often reassuring Compellent partners about
the benefits of working with Dell, according to partners Channel Insider spoke
with at the event as well as shows-of-hands during formal sessions.

“I used to compete against Dell pretty regularly,” said
Frank Politano, Florida territory manager at Syscom Technologies, a 21-year-old
Jacksonville-based Compellent and EqualLogic solution provider. “My biggest
fear was that Dell was going to commoditize. But they left the technology
alone, and actually flushed cash into R&D.”

As a standalone business, Compellent—which sold
exclusively through the channel—had 454 partners and Dell had more than 2,200.
Today, Dell has more than 2,500 partners selling the Compellent family of
storage solutions, the company said.

Earning the
Channel’s Trust

Both Dell and its partners recognize each party must earn
the other’s trust, said executives.

Dell hopes to do so by stating—and adhering to—a simple,
constant message throughout the company and its PartnerDirect
program, said Dell’s Davis.

“There are some very basic principles we, as a team, said
we were going to do,” he said. “We had a whiteboard of ideas and we could only
do three out of 40, but we did the three. We try real hard not to commit to
things we can’t deliver. The second one was we never sat down and envisioned
we’re going to wake up on Monday morning and 20,000 sales people are going to
their heads around.”

To encourage its traditionally direct salesforce to
partner with the channel, Dell’s changed its compensation model, Michael Dell
told Storage Forum attendees during a live presentation.

“We said to all our salesforce, ‘You will be compensated
the same whether you work with a partner or not,’” he said, noting that the
most productive sales professionals are those who team-up with solution
providers.  “We’re really pleased with
the progress.”

Finally, Dell wanted to promote a culture of listening
to—and acting upon—partner feedback, Davis said. When Dell acquired both
EqualLogic and Compellent, it kept the best of both vendors’ channel programs
intact, and actually expanded elements beyond those product lines, Skelley
said. Compellent’s extended deal program is now available for EqualLogic, for
example, he said.

The vendor has a guidelines book and ombudsman to address
deal registration issues, said Skelley. Today, 70 percent of deal registrations
are approved the first time they are submitted, he said. With certified
partners, there is an 84 percent first-time approval rating, said Skelley. Most
times, Dell rejects deals because another partner already registered them; they
are not within the revenue threshold; there partner does not provide enough
information, or they are Dell Direct accounts, he said.

“Do we have issues? Yes. I think if you ask any company,
there are issues. When we first started our program, there were weekly meetings
about deal-registration violations,” said Skelley.

The meetings paid off, solution provider executives said.

“[Dell’s] made tremendous progress since we became
partners in 2009. Kudos because you’ve listened to that feedback and
implemented it,” said Sonia St. Charles, CEO of the Davenport Group, a St.
Paul, Minn.-based VAR that specializes in data center solutions. “We’re going
to the direct teams. We’re showing them our [client] portfolios. Nobody wants
to introduce a customer to somebody they don’t trust. It goes both ways. The
trust is building both ways.”

By developing relationships with Dell’s direct salesforce
and its local field agents, storage VARs can extend the reach of their own
sales organizations, said Theresa Williams, president of Data Media Solutions,
an Omaha-based solution provider, which used to sell Dell products before the
vendor had an indirect program.

“You feel now that you have this collaboration and
partnership. I feel a lot of it has been driven from the EqualLogic and Compellent
worlds, where everything was 100-percent channel driven. Your responsibility as
a business partner is to engage more Dell direct representatives,” she said. “They’ve
never been conditioned to sell through the channel. You try to look at it from
their perspective.”

In order to recommend partners and bring VARs into
prospective clients, solution providers must invest in educating Dell sales
representatives about their services, offerings, and capabilities, said Mike
Egmont,  partner in Flagship Networks, a  network integrator in Stamford, Conn., and a
member of Dell’s advisory panel.

“They need to know who you are and what you bring to the
table. It’s like any business relationship: It’s about building value,” he
said. “The reps that get it know we’re an extension of their force.”

What’s Next for
Dell’s Storage Channel

Although much has been accomplished, Dell recognizes much
work remains to be done, executives stressed during the user and channel conference, which
was held in Orlando this week.  

“We built a plan this year and we’re all signed up and
committed to more than two-time the industry growth rate in the U.S.,” said
Dell’s Davis. “We need partners engaged in that. With that, it should help us
grow and gain marketshare. I don’t think we necessarily need more partners. We
do need more trained partners. And we need deeper training. A part of that is
on our partners, and a part of that is on us to make it easy.”

Last year, Dell offered 76,000 courses worldwide, Skelley
said. Solution providers took hundreds of classes on the company’s storage
solutions and technologies, he said.

Whether they choose to partner with Dell or not, there is
little doubt the once direct-only vendor will continue to impact solution
providers, said Storage Forum attendees.

“You can get on the bus or you can watch it go by,” said
Kristy Wilke, sales associate at Data Media Solutions. “It might be a bumpy
ride, but you don’t want to miss it.”