Dell Launches Formal Partner Program

Direct-sales stalwart Dell on Wednesday launched its formal global channel program, providing details and a U.S. launch of the partner program that Chairman and CEO Michael Dell first hinted at in May of this year.

"Our goal is to grow our partner business faster than the company average, and to certify several thousand partners whose solutions align well with our priorities," Greg Davis, Dell vice president and general manager of Americas Channel Group, said during a media call about the program.

Called Dell PartnerDirect, the program will consist of a Registered Partner tier and a Certified Partner tier with a formal logo for each program level. Benefits include deal registration, a partner portal, a channel sales team, partner-focused support, financing and a new compensation plan for Dell's sales force.

As Dell's growth slowed, and its market share shifted into reverse in key segments, Michael Dell resumed a much more hands-on role and began considering moves long taboo at the company. Recent steps included an aggressive series of deals to put Dell products into retail stores worldwide and promises to both acknowledge and standardize the Dell channel. Usually assumed to be a direct-sales company, Dell in recent months has publicly estimated that its channel accounts for $9 billion of its $60 billion in annual revenues, and claimed about 30,000 worldwide resellers, 15,000 of them in the United States.

Dell's newly standardized and publicized global channel program has many obstacles to overcome, including a legacy of inconsistent outreach to partners and a history of conflict between partners and Dell's direct sales force.

At a virtual town hall meeting with solution providers Wednesday to introduce Dell PartnerDirect, Davis faced suspicion. "What makes me believe that Dell is more committed to partners than before?" Davis read aloud from a partner question submitted over the Web. "I hope you see that we're making a commitment," Davis answered, but added, "We realize that a partner program and a partner relationship is not built in a week or a month, but it's built over several years based on what we do."

David Cantu is a co-founder of a Redmond, Wash.-based VAR that has been part of Dell's unofficial channel and has also endured occasional inattention from the computer maker. Cantu, of Redapt Systems, said during the town meeting that he is encouraged by the Dell PartnerDirect program. "We've been very happy with the way the program has developed," Cantu said. Of the PartnerDirect announcement, he said, "It means that Dell officially recognizes and supports the program that we've invested our resources in."

While the program will be largely consistent across geographies, Dell is rolling it out on a region-by-region basis. Participation will begin in the United States, followed by Canada in January and the Europe, Middle East and Africa region in early February. Launch dates for Latin America and the Asia/Pacific region will be unveiled later.

Dell executives expect to concentrate on signing up existing U.S. partners as Registered Members for the first 45 days of PartnerDirect's existence to open the program's benefits to existing resellers.

Benefits available to Registered Partners include:

- Access to the portal, which includes product and services training, technical support chat, partner community forums and partner-to-partner networking.

- Deal registration through the partner relationship management tool. The deal-registration tool had a very small pilot program: used for eight days by 24 partners who registered 17 deals. Registered Partners will be able to register opportunities for 60 days. Certified Partners will get 120 days to close deals, and partners selling into the public sector can get up to 180 days due to the longer buying cycle in government deals.

- A dedicated channel sales team of more than 360 people, which includes field-based account managers. Dell is also setting up partner-specific post-sales support.

- Financing with 30-day credit terms. (Certified Partners will have 45-day terms.)

- Fee-based warranty self-service that will allow Registered Partners to bypass the troubleshooting process to order spare parts for customers. Spare-part ordering will be free for Certified Partners.

- Dell logos. "For the first time in 23 years, we have partner logos ... and a global process for becoming a partner," Davis said.

In addition to program benefits, Dell is pushing the structural advantages of its business model for partners. One element is the company's global scale in build-to-order, which Davis contended can level the playing field for small to medium solution providers. "We custom-build 140,000+ systems for customers and partners every day," Davis said. "Our ability to custom install software in our factory reduces deployment and ongoing support costs that streamline the operational efficiency of our partners and minimize any compatibility problems they have with their customers."

One other structural issue that Dell positions as an advantage for partners is the decision, inherent in the "Direct" part of the program's name, to keep distributors, and their cut of profits, out of the mix. Partners will order directly from Dell and can have orders shipped straight to customers.

Meanwhile, Dell also wants partners to start thinking about the lead-generation opportunities that Dell's daily Web traffic of 1.6 million visitors could present. That said, the company announced no specific promises to partner involving lead generation.

Bigger issues for most partners involve trust -- and the company laid out concrete steps.

A new compensation structure for Dell's direct sales force went into effect on Wednesday. "Starting today, all direct sales teams will receive equal compensation for activity and sales that are delivered through partners or direct to customers. They are now paid regardless of route to market," Davis said. In addition, Davis and Josh Claman, vice president and general manager of Dell's EMEA Channel Group, are the company's first general managers for channel business in Dell's history.

The upper Certified Partner tier of PartnerDirect will serve to align Dell with partners that can help the computer giant reach strategic markets.

The first certification involves the managed services provider market, building on Dell's recently closed acquisition of MSP-tools provider Silverback Technologies. Dan Phillips, formerly of Silverback and now Dell's global director of channel services, says, "We're looking for hundreds as opposed to thousands of managed services partners."

Joining the Dell program at the Certified level will cost existing MSPs $5,000 and partners new to the MSP landscape $9,000. Additionally, partners will undergo a business review with Dell and complete training in a program modeled after Silverback's existing program. About 150 current Silverback partners will become Dell Certified MSPs once they successfully become Registered Partners.

One of those partners, Tim Hebert, CEO of Atrion Systems Inc. of Warwick, R.I., believes the Dell name will give his company a boost.

"The end-user community is not savvy about managed services," Hebert said. "Because of [Dell's] name-brand recognition, clients are now starting to ask about [managed services.] I don't have to overcome as many objections as I did in the past."

The next partner certification path after MSPs will be enterprise products, which Dell defines as servers and storage. That certification level is planned for availability in about two months.