Would you partner with Dell?

It has been a long time coming, but Dell launched its PartnerDirect program to the Australian channel last month.

In reality, Dell has been selling to channel partners for years, the only difference being that it treated sales to resellers as further direct business.

Dell’s extremely successful direct business, driven largely through marketing and a well-developed online sales portal, is built on value for customers through low overheads.

Most vendors have built their business by using the channel and the fact that it has taken Dell so long to realise the value of the channel has not escaped the notice of the reseller community.

CRN recently spoke to Dell about how its channel program will work and what partners can expect should they decided to partner with the tradionally direct company.

Rob Makin, channel strategy and acquisition manager at Dell, said PartnerDirect will complement rather than conflict with its existing direct model.

Partners will not need to hold any stock, with Dell’s direct build model removing the need for distributors.

“We want to drive profitability and margin into the channel and we believe not asking our partners to hold stock is a key way of doing that,” said Makin.

Dell has opened its entire product portfolio to the channel and created a single-tier program designed to appeal to a broad range of resellers.

PartnerDirect is split between registered and certified partners,
with different benefits for both.

Registered partners will have access to finance options, a channel portal that provides training and partner materials, as well as Dell’s Premier Page which allows fast configuration and pricing of Dell hardware.

To entice partners to invest in Dell’s business, certified partners who do
a lot of business with Dell are eligible to receive additional benefits such as access to channel marketing managers, use of demonstration units, enhanced finance options, field-based account management and technical support.

To combat any concerns over its direct background, Dell has created entirely independent sales teams to assist with direct and partner sales.

Makin emphasised the importance of registering sales leads that will enable discounts above those available to the direct sales team.

“This will allow our channel partners to register particular opportunities with us. Within that scheme we offer a variant of protection and special pricing,” he said.

Jeff Li
Managing director at Pioneer Computers

I don’t think it’s going to work for them.

They haven’t been in the channel, they have never done this before and they really don’t understand it.

They don’t have experience in it. They want to get more market share from other vendors and their direct sale model is not working very well.

They have been competing with the channel for the past 10 or 20 years.

We have been enemies for 10 years. We have a good memory. Suddenly they turn around and try to be a friend of us. It feels strange when your enemy wants to be your friend.

They are not a channel-friendly vendor. Some vendors actually compete with the channel.

They are not going to give the channel more margins, they are going to squeeze it. How can the channel believe them or trust them?

From the first day of their business they’ve been direct.

Their reputation is selling direct, not making money for the channel. On the selling price I don’t know how they can be making money themselves.

The company is run on specials, how is the channel going to make margins from that? They are going to get burnt. It’s different to HP.

They can give a special price, they have been in the channel and they know how to play in the channel.

There’s a lot of brands in the market. If you can’t sell Dell you can still sell any of the other brands.

You don’t need to focus on Dell, you’re better off going for someone you really trust.

Dell’s ideas are really fantastic for themselves, just not for anyone else.

Dell should go channel only, not both.

Lee Curtis
Business development manager at ICE Systems

We have done business with Dell, once, in the past, on a project for Macquarie University. We built a small supercomputer using eight high-end Dell systems.

Dell provided us with the opportunity. They came to us and said “we have a client who wants to build a supercomputer”.

The vendor needed a specialist to turn raw hardware into a super computer and it knew that was something that ICE could do – it worked out well that time.

Later down the track we brought another opportunity to the vendor but when we went inside the deal got hijacked by the vendor’s direct team. Obviously we are not in a hurry to have that happen again.

Partnering with Dell doesn’t work well. One of the key-value adds for ICE is that we own our clients.

We are very high-touch with clients and we understand their business. It takes a significant amount of time to build up trust and to really care about them.

That doesn’t just happen.

I’ve spoken to our MD about Dell and he feels that the vendor will struggle with the channel. It never quite worked out how to be a vendor partner and has always gone direct.

Dell doesn’t offer much of an incentive in the channel, it never has.

There’s a lot of hardware vendors that can come close to Dell in value and offerings of small premiums.

We have laboured long and hard cherishing these types of clients.

As a reseller, we need to have confidence in our supply chain and we really don’t think Dell provides the confidence that we need.