Compared to last year, the changes to Dell’s partner program as the company begins a new fiscal year are much more modest, although the extension of rebates for new business to Registered partners will cause much cheer in that quarter.
Last year, Dell kicked off its new fiscal year in February on the channel front with a major shift in policy, when it implemented a significant change to its channel strategy by incenting Dell Direct reps to work together with partners on what had been direct accounts. This year is more about consolidation than restructuring. Changes have been made however, to provide specified groups of partners with additional benefits, with a highlight being the extension of new business discounts to the entry-level Registered Tier.
“We saw strong double digit growth in the business in a balanced way – across the enterprise, devices, and servers, and also saw balanced growth across partner types, between large VARs and SIs and smaller regional VARs,” said Cheryl Cook, Dell’s channel chief. Globally, channel revenue is now over 40 per cent.
“We are paying out more in rebates because of this growth,” Cook said. “Rebates were up 79 per cent in Q4 and 52 per cent year over year.”
The 20 per cent compensation acceleration to Dell salespeople for working with partners on sales in strategic areas has been renewed for this fiscal year.
“We are renewing that program, not sunsetting it, to encourage teaming and collaboration between Dell and partner community around new business in key areas,” Cook said. “Working with partners to drive incremental opportunity around new business yielded 12,000 new customers to Dell, and 7,000 customers that sought line-of-business expansion.” That translated into 20,000 new orders, including 3000 new storage orders, and 4400 new software orders.”
Some additional discounts have been added for the new fiscal year for bringing in new business. Partners in the Registered Tier will get an additional 20 per cent discount for storage, 12 per cent for PowerEdge servers, 20 per cent on networking, and 5 per cent on client devices. Previously, these discounts had only been for Dell’s top two tiers. Partners in the Preferred and Premiere tiers have not been left out, as they will get new incremental back end discounts of 2 per cent for client devices and 4 per cent additional for enterprise products – servers, storage and networking.
“This is all for green fields sales, net new business for Dell, basically a competitive takeout,” Cook said. “The market now is very competitive so we want to motivate the partners.”
Also new are the VDI and workstation competencies announced in November, as well as new enhanced competencies in security and storage.
“These advanced competencies let partners differentiate themselves with more unique skills,” Cook said. “The direction we are taking with security is being more relevant to our partner base there, who include a lot of SonicWall partners, so they can participate at higher levels.” Many of these security partners are smaller companies, but run highly profitable businesses.
Dell has also enhanced its Partner AdvantEdge SPIFF program for individual sales people.
“We previously just had gift rewards, but now we have added a $250 cash card reward,” Cook said. This has been launched in the U.S., and is not available yet in Canada, but Cook said cash cards are “coming soon” to Canada.
Cook noted that Dell recently launched a new services offering, extending its ProSupport Plus proactive and predictive support to tablets and PCs.
“This is the first time it is available on client products, and HP and Lenovo don’t have anything similar,” Cook said.
Cook also indicated that Dell’s momentum in Canada continues to improve.
“We are delighted we have distribution set up there finally,” she said. “The competitive dynamics in Canada are similar to the U.S. HP’s decision to separate the company has created an opportunity. IBM’s server divestiture to Lenovo has led to some conversations with IBM partners. We want to make sure we are on the front foot, which means taking a more aggressive position with HP and IBM.”