The transformation of Dell from the champion of the direct sales model to a firm believer in the indirect approach continues apace with the announcement of a number of changes to its PartnerDirect channel programme at the Dell Enterprise Forum in Frankfurt.
According to a report in MicroScope, Dell has added new lead generation capabilities to the programme to “encourage a channel-led approach for specifically targeted customers that would benefit from partner involvement”.
The vendor is also in the process of a restructuring which will consolidate its channel and segment sales teams under a single country-by-country leadership. Some of these measures have already been announced in the US where CRN revealed Dell had introduced a programme that would incentivise Dell direct representatives to push 200,000 of their accounts to channel partners.
And CRN UK reports Dell EMEA president Aongus Hegarty saying the company has a target of increasing channel business from around a third in Western Europe to 40% next year and 50% “in the next few years”.
Among other measures the vendor has included in PartnerDirect are end to end sales support from Dell sales teams across server, storage, networking, software and other lines, as well as increased rebates for deals that include multiple product sales.
On a more practical level, it has launched a channel financing programme through Dell Financial Services to provide an extra fortnight’s credit to premier and preferred partners and distributors, as well as higher credit limits. In addition, there will be a six-fold increase in demo units and lab gear and special leasing conditions on demo kit through DFS. Premier tier partners operating in Dell’s four software competencies will also gain an extra two per cent rebate.
EMEA channel sales vice president and general manager Laurant Binetti told MicroScope the changes would make it easier for partners to work with Dell sales teams and give them “a cost advantage over competitors”.
That’s his view and he’s entitled to it although I’m sure quite a few competitors would be only too willing to take issue with that statement. Anyway, what the announcements do reveal is that Dell is becoming more strongly focused on the channel as time goes by. However, it is worth pointing out that quite a lot of time has gone by since CEO Michael Dell announced plans to introduce a channel strategy in May 2007 and the vendor unveiled that strategy in December 2007.
Some people might think that getting to 33% indirect sales in six and a half years is a tremendous achievement but others might be distinctly underwhelmed. And just how many years will it take for Dell to achieve a 50:50 split between direct and indirect in Western Europe? Even Hegarty doesn’t seem to know the answer when he talks about “the next few years”.
It is likely that things could get harder as Dell tries to chivvy more customers to buy from channel partners. Those that have already taken the indirect route are obviously more amenable to the idea than those yet to be convinced after seven years. Of course, some of that reluctance may not have come from customers but from Dell, or rather people in Dell sales, so giving them an incentive to move customers to buying from partners is a sensible move.
The good news for Dell channel partners is that nearly all the business being pushed their way is incremental, especially the slice of the pie which the vendor is moving from direct to indirect. But while the latest changes are a step in the right direction, Dell still has quite a way to go before it gets anywhere close to the level of an HP where nearly 70% of enterprise business is through the channel or Fujitsu which claims two-thirds of its business in the UK and Ireland is indirect.
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