LAS VEGAS – At EMC World, EMC laid out the plans to integrate the Dell and EMC channels to EMC partners. The two vendors are confident the similarities in the companies and their channel approaches will make for a smooth integration. While the plan immediately following the close is to have minimal change and disruption, they hope to fully integrate the two programs in a breathtakingly short time frame – ideally by the start of Dell’s fiscal year in February 2017.
CEOs Michael Dell and Joe Tucci strongly affirmed their commitment to the channel as a key part of their business in a joint press conference Monday afternoon.
“As big as the company will be, there is no way we could be successful without channel partners,” Tucci said.
Of course, that wasn’t always the case. At EMC’s partner event Monday, long-time channel chief Gregg Ambulos, who has been in that role with EMC since 2001 – an amazing run of longevity in a role where tenures across the industry are typically short – told partners at the Global Partner Summit component of EMC World that a bumpy channel road was one of three things Dell and EMC shared in their historical track records.
“We were both darlings of Wall Street in the 1990s,” he said, noting the massive stock run-ups of both companies over the decade. “We have both grown a lot through acquisitions. Joe Tucci calls ours ‘the string of pearls,’ acquiring key companies in areas where it would be hard for us to grow organically. We both also have a strong track record of integrating those companies well.”
However, both companies, Ambulos acknowledged to partners, had a spotty early channel history.
“We both started off direct selling, and there were bumps in the road for both once we added channel,” he said. “EMC was rated one of the worst partnering organizations in the industry. When Dell started channel, there was widespread partner doubt of whether they could change. Now over 60 per cent of EMC’s business goes through the channel, and over 40 per cent of Dell’s”
Ambulos emphasized to partners that there are two key channel milestones once the deal closes – the first being Day One, and the second being 2017.
“On Day One, we want to make sure people understand there will be minimal changes and minimal disruptions,” he said. “We will continue to have two separate partner programs and deal registration programs. However, we will closely cross-check deal registrations to make sure there’s no overlap.”
The ambitious part is planned for 2017.
“If you take the EMC channel program and Dell channel program and put them side by side they are very similar,” Michael Dell said. “We will put them together and have one program.”
This is ambitious because of the proposed timeframe. The goal is to have this accomplished by the beginning of Dell’s fiscal year, in February. That’s February 2017, not February 2018.
“That would be nirvana,” Ambulos said. “We have every intention of doing it sooner than later, but we want to do it right.”
Typically, full channel program integrations take much longer than the four months in which the two companies are hoping to get this done here. Eighteen months is more typical. The main challenge is the back end technical work, particularly for the harmonizing of the deal registration systems. When EMC last did a major overhaul of its partner portal to bring it up to date with partner expectations and requests, the project took a year for full completion.
“The systems piece will be the biggest factor, how fast we can get this done,” Ambulos said. “If we can do it in February we will. At the Global Partner Summit, Marius Haas [Dell’s Chief Commercial Officer and President of Enterprise Solutions] said there are a lot of synergies. We aren’t starting from ground zero.”
A show of hands at the Partner Summit indicated that between 25 and 40 per cent of the partners in attendance are currently both Dell and EMC partners. Ambulos said that the number has increased since the deal was announced, with more partners selling both Dell and EMC, as well as selling Dell and EMC together in single solutions.
“Partners know this is going to happen,” Ambulos said. “They see this is a great opportunity for themselves. They have been going to both their customers and the sales organizations and becoming the bridge in putting these deals together.”
Ambulos said that Dell Technologies – the new company – will be taking steps of its own to further accelerate this process.
“We have a huge opportunity around cross-sell and upsell, and will put incentives in place to accomplish this,” he stated.
Ambulos also indicated that there are differences in how Dell and EMC’s global channel structure work today, and that the new company will take the path that EMC has been on.
“We will follow more of the EMC model for centralized global channel structure for consistency in channel strategy across the globe, with the field-based channel organizations,” he said. “With Dell, channel resources are into the theatre sales. At EMC, they are hardlined into the sales organization, with one overall strategy to drive it through the globe.”
Michael Dell emphasized that the channel understands the benefits to themselves of the new and larger company.
“Partners see there is no company that has the breadth of portfolio we do, and that’s certainly a positive factor. Between EMC and Dell, there are not a lot of big channel partners we are lacking. We want to go deeper with the more important partners that we already have.”