Dell EMC Channel Program Remains a Work in Progress
Dell EMC outlined the bare bones of a unified channel strategy that come Feb. 1, 2017, will consist primarily of four tiers. However, beyond identifying the names of those tiers, just about every other aspect of the channel program is still being worked out.
The unified Dell EMC channel program will be segmented into Gold, Platinum, Titanium and an exclusive Titanium Black program that is reserved for the company's best partners. Each partner will be assigned a classification based on the amount of revenue they generate in a specific region or market segment, the total amount of Dell EMC products and services they regularly attach to their deals and the share of total wallet they provide Dell EMC. The company expects to have completed assigning partners to tiers by December, with reviews of their status occurring every six months from then on.
At a Dell EMC Global Partner event, the company's Global Channel Chief John Byrne told attendees that Dell EMC would also have zero tolerance for poaching of deals by its direct sales force. But Byrne was unable to define what zero tolerance would actually mean.
In the existing EMC channel program, a direct sales representative gets a first warning when it is determined they poached a deal from a partner. The second offense results in automatic termination. The existing Dell channel program has no specific penalties for poaching deals, but Dell does make sure that its salespeople are not compensated more for taking a deal direct versus allowing that same deal to move through the channel.
However, Dell EMC is investigating replacing the "hard deck" channel program that EMC has in place that limits where the EMC sales force can take sales direct to a limited number of high-end enterprise customers with a line-of-business (LOB) incumbency initiative that would recognize the long-term relationship a partner might have with a particular customer.
"Right now, we're just announcing the bare bones of the channel program," said Howard Elias, president of Dell EMC Service and IT. "But we are looking at a LOB incumbency approach to replace the hard deck."
That approach, however, would not necessarily mean that partners would have exclusive control over all the deals flowing through that customer. Dell EMC channel executives added that they will be keeping track of partners that register deals only to see those same partners closing those deals by selling equipment from a competitor.
The Dell EMC channel team at this juncture is also unable to address how training, certifications, back-end rebates or market development funds will be determined.
In addition, Dell today unveiled a new financing initiative designed to encourage organizations to treat IT infrastructure deployed as a subscription service that they can treat as an operating expense. But how that program will actually manifest itself across the Dell EMC channel remains to be seen.
Dell EMC is also wrestling with complaints from partners stemming from rapid price cuts the company makes online as part of a special program to drive a quarterly sales goal that winds up undercutting the prices that partners quote to a customer.
The combined company is centralizing its channel marketing operations under Cheryl Cook, head of partner marketing for Dell EMC, to, in part, better communicate those price changes to partners before they happen. Previously, Cook was a channel chief for Dell.
The one thing Dell EMC is pushing the channel partners to do is resell more services delivered by Dell. Increasingly, product services are being automated by IT vendors that can provide them more cost effectively than the average solution provider. As a result, most IT services providers will need to shift their own focus to providing higher-level data and application services while at the same time deriving more of their reseller margin from services than from the sale of an actual product.
Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications, including InfoWorld, CRN and eWEEK. He currently blogs daily for IT Business Edge and contributes to CIOinsight, Channel Insider and Baseline.