Dell EMC Channel Chief John Byrne Offers Carrot, Stick To Spur Services Growth

Partners have heeded the call to sell more services, but Dell EMC Channel Chief John Byrne isn't about to take the pressure off. He's reminding solution providers that they have to hit a minimum level of services sales to maintain program tier levels next year.

"We’re basically doing the carrot and the stick," Byrne (pictured) said in an interview with CRN. "We'll reward you for attaching our services, but we also said your tier threshold for next year is going to require hitting a minimum gate for services."

Partners in Dell EMC's top Titanium tier, for example, have a $6.5 million services quota for the current fiscal year. A top executive at one Titanium partner told CRN that he's already informed Dell EMC channel leadership that his company is not likely to hit that goal.

[Related: Dell EMC Channel Chief John Byrne On Cross Selling, Pushing Services And Breathing Life Into The Storage Portfolio]

"They're definitely making a push," the executive said, "although, that's a pretty high bar."

The services requirement is on top of an already daunting climb for solution providers seeking to maintain status after being grandfathered into tiers – Gold, Platinum, and Titanium – that carry much heavier revenue requirements for legacy Dell partners than they did in the past.

So far, Byrne said, partners seem to have taken the message to heart. Dell Technologies reported $9.8 billion in services revenue in the first half. "We said start attaching our services. The good news is our services growth in the channel was close to double digits," through the first half of the company's fiscal year.

Still, establishing a services business can be expensive and challenging for solution providers, especially smaller VARs that may not have the budget power to do so. Selling services only works for solution providers that can achieve high rates of utilization among customers. Without that, labor, and other costs shouldered by resellers can complicate the equation.

"We're a big fan, and we use them pretty consistently, just attach them to everything we do by default," said Michael Tanenhaus, president of Mavenspire, an Annapolis, Maryland, solution provider that works with Dell EMC. "It's a way to help people partner better," Tanenhaus said. "If everybody's on the same page with how to go to market together, it makes it easier to work together."

Tanenhaus said there's plenty of room for Dell EMC's services business to grow in the channel, too, noting that while Dell had a broad range of services offerings available to the channel before its $58 billion acquisition of EMC last year, EMC did relatively little services business.

"It's a cultural difference, and we haven't gone through the full arc of people knowing about it or testing it out, so it's still growing, and it's still in its initial arc," Tanenhaus said. "Legacy EMC was little tiny SKUs that went out to the partners for services, and EMC was not gaining margin on those programs."