CRN Exclusive: Channel Chief Byrne On The New Dell EMC Unified Program, 'Zero Tolerance' For Violating Deal Registration And Fixing Unrealistic EMC Partner Sales Targets

Byrne On The Record

Dell EMC Global Channel Chief John Byrne spoke with CRN about the new four-tier Partner Program which will roll out Feb. 1 and his 'zero tolerance' policy for direct reps that violate deal registration.

Byrne also directly addressed what he called unrealistic EMC sales targets, automating and simplifying rebates and leveraging the Dell EMC independent business units including VMware.

The conversation with Byrne came on the first day of the Dell EMC World conference in Austin, Texas where Byrne officially rolled out the new Dell EMC Partner Program and it will rank partners in Gold, Platinum, Titanium and an ultra-exclusive Titanium Black tiers.

Byrne Tuesday also said plans for how to handle MDF and rebates are also in flux as he attempts to strike a balance between a program that offers partners customization while remaining simple and predictable.

Byrne took the stage at the Dell EMC World's Global Partner Summit to provide an update on progress toward merging the two channel programs. What follows is an edited excerpt of the conversation.

What drove the decision to change the program's name and the names of its tiers?

The partners were all like, 'can you please drop Direct from PartnerDirect?' They were saying Dell and EMC have got phenomenal brands and powerful brands, please leverage it. No buzz words, no catch phrases of the day. We're getting really predictable in terms of what we want from [partners] so they're not having to guess. One thing EMC does do a good job of is something called 'tier envy.' With us, classic Dell, we don't have that tier envy going on.

You've re-named the program's tiers, what are they going to look like?

When we were thinking about what do the tiers look like, let's really have fun with this, let's really differentiate it. So, the entry level is Gold. For a lot of people, that's the top tier of their program. Then you've got Platinum and then you've got Titanium because it's a unique opportunity. Then, within Titanium, we're going for a special tier, Titanium Black. That will be for the very, very upper echelon of our program.

You'll be telling partners which tiers they're in and what it takes to advance?

Correct. And a partner could say, 'I'm not a solution provider, I classify myself as an MSP.' Well, okay, let's have that discussion. That's a fair discussion, but as far as the tiers, the criteria to get in will be very descriptive. The overarching criteria will be the same: Revenue, share of wallet, multiple lines of business, attacking the market. But that number is different in North America than it is in Vietnam, so I'm going to be very disciplined, and the only way I can do that is to create tier envy.

I'm clearly going to reward for new business. There will be some reward for exclusivity, if a partner is all-in with us. We want to shock and awe the competition. They never saw line-of-business incumbency. They're not expecting that we'll make Gold the standard of the program, or that we'll have a special VIP section. They probably didn't think we would have different tracks by different partner type.

What have you been hearing from partners about the Dell program versus the EMC program, and how has that driven your decision making process?

Something I heard really loud and clear when I was traveling in Europe over the last two weeks: Partners were saying the way the program feels today, both EMC and Dell, is EMC is very simple and very predictable and they love it, but it feels as if we're all treated the same way, and partners are like, 'we're not all the same.' You've got solution providers, you've got the MSPs, you’ve got cloud guys, and every partner's got different needs and a different customer base, so we thought that on the tracks, we thought let's be very specific on partner type and the customers they're targeting. So, we're going to keep it simple, and partners crave consistency as well.

What areas of the program are appropriate for consolidation?

We have to really keep the program simple. I want to be ensuring that my processes are better. On Feb. 1 there will be one portal with one sign-on. There will be one deal registration, which is important, because as we bring the programs together, I can't have the old EMC partners going one place for deal reg, and another place for the Dell partners. I have to bring it together.

What's your thinking around MDF and rebates? Will the structure of those programs essentially match the current Dell programs?

We've talked about MDF. [EMC's] MDF has been cut so dramatically, and I don't they care so much about their MDF being cut dramatically if your front and end back end are lucrative. So we're now going through and asking what do you prefer? I know how much money I have for front end, back end and MDF. That's the number one thing I'm asking, what do you prefer? What I'm hearing is that it depends whether you're a classic partner, or whether you're a disty. That's determining the answer. It depends where you are around the globe, and it really varies. A lot of feedback in Europe was that they like a balance. Dell partners love the back end. They're used to it. It's predictable. The EMC partners will tell you that while they're heavily front end, they would like to see more of a balance. They want MDF for the cool stuff.

What decisions have you made about changes to rebate programs, and when will they go into effect?

Our rebates were hard to calculate, and partners were telling me that they were employing three or four people just to figure it out what they were getting money for. When they get it, it's great, because it's a lot. But the challenge is that they've got to be invested for the long-term. They have to know that that money is going to continue. We're looking to automate all of the rebates. I'm pushing for the change to be ready for February. That one's tricky because it's a significant change. I'm going to say to the partners, look, I'm going to be transparent. Know that I'm working on it, and know that I'm working for them. If it's fully automated, I'll be constantly updating you on where we're going in the journey. I've got to take complexity out of their motion and just let them go sell.

You're using the hard deck, what you're calling line-of-business incumbency, for storage. Do you see that going across the board in the future?

When we're looking at it internally, I think it's a tale of two cities. There's the client space and there's the enterprise space. There are partners that sell the full breadth of the portfolio, but I think look at the enterprise space, look at EMC. Even though EMC had a hard deck, above that hard deck, 50 percent of that business went through the channel, which shows you that even with the best enterprise technology on the planet, the best enterprise sales team on the planet, that the customer still saw value in the partner community.

Why is it different for the client PC business?

When you do the analysis and you look at client, especially in mature markets, customers are very comfortable buying direct. When we're thinking about it internally, one of the big things is the services attach. We are collectively, both Dell and our partners, leaving money on the table on services. So, when I look at direct, our ability to attach is spectacular, and I think if we can build a program where you're really incentivizing to attach ProSupport, as well as professional services, that really sees massive gains in the channel. Right now it's customer choice with line-of-business incumbency for storage, but we are looking at how do we optimally cover the market?

What drove the decision to use the hard deck for storage?

No one expected line-of-business incumbency. EMC partners didn't expect it, but we sat down with [Chairman and CEO] Michael [Dell] (pictured) and Marius [Haas, president and chief commercial officer] and Billy [Scannell, president of enterprise sales] and Jeff Clarke [vice chairman and president of client solutions] and said partners are spending an enormous amount of money, their employing people, they're doing the training, they're an extension of our sales team, why you wouldn't you want to protect them?

How do you protect partners outside of the storage line-of-business incumbency?

The ultimate form of protection for our partners is deal registration. EMC partners don't use deal registration as much as we do. We do it, but people need to know, and I don't think it's been as forcefully implemented as I'm going to say it, but we will have zero tolerance, zero, for anyone that violates deal registration. Partner is part of my strategy to attack the market. Partner is part of my sales team. I'm going to protect them. Michael [Dell] is very much about being a trusted brand, a trusted advisor, high in integrity. If I find anyone abusing it, I'm telling you I will have zero tolerance.

How big is the opportunity for the Dell EMC channel once the channel program is unified?

Everybody keeps talking about us as the dark horse of the channel, and they're right. They're absolutely right. Within our company, we have $35 billion of channel revenue flowing through here right now. But I also know my share of wallet is pretty low. My share of wallet when I look at big partners around the globe in aggregate is something like 10 points. Partners want to grow. They want to grow top line and bottom line, and the Dell program has been growing at 3X the market. Since [the company] went private, it's up a third. EMC is up to 64 percent of their business going through the channel. These guys who are already all-in with our competitors are already topping out on it. This is an extraordinary opportunity when you look at the portfolio. No one else can do this.

How important is it to stick with the program you roll out once it's introduced in February?

I thought the number one thing partners would want to talk to me about would be profitability, but it's predictability, and it's predictability of program, and predictability of engagement. If you look at the program, at Dell we change our program constantly, every quarter, but it's very lucrative and that's why our engagement scores were so high.

We're really going to be really consistent. When the program is rolled out, it'll be rolled out for the year. A lot of EMC partners were getting targets that were too aggressive. [EMC was] a publicly listed company saying we're going grow at 3 percent, and partners are looking at the targets going, 'I can't figure this out.' We're going to be aggressive, but realistic. If I put you in a tier and a track, and I tell you how to make money, but I artificially inflate your targets, that's not really the tier you're in because you can never make that earn.

How are you approaching partner training?

EMC has done a remarkable job on training. Every product manager on the planet wants every sales manager to know their product and every product, but it's not realistic. I've got to make sure that I have an overarching theme that I want our partners to understand. How do you pitch Dell EMC? How do you pitch Dell Technologies? How do you understand converged? How do you understand hyper-converged? Then, we can tailor the specific training and products specifically for that partner and to what they're seeing. We're going to simplify training. EMC MDF was very confusing, so we're going to simplify MDF.

How important is it for partners to being selling the portfolio end-to-end?

Think of the big guys that sell one product line and sell a bucket-load of it. We have significant share of wallet. Clearly we're going to reward those behaviors. But I also have a number of partners who sell multiple lines of business, and we want partners who sell all our portfolio, sell the enterprise, derive solutions, attack the market, does all the training. I'm going to reward you as well. So, there are two ways to get into the track. One is to be big. Another one is selling the portfolio, attacking the market. You can be on the same track. Maybe it's less revenue, but that's the way we're thinking about it. That's the mapping that we're literally doing right now so that it'll be available in December. In December they'll know where they are and they'll be ready for February.

How do you stitch together the program you're building with existing programs at the independent business units like VMware, Pivotal and Secureworks?

We want our distributors, same as our partners, selling the portfolio. We want our distributors to be attaching services. We want distributors to be building solutions. As I'm building that, I have a lens on Dell Technologies. There are some massive distributors that also sell VMware. I am not building the Dell Technologies channel, but if I'm looking at the map and saying who do I want for Dell EMC distribution, who does VMware use? If they can do all the things Dell EMC wants them to do and they've got VMware, that allows us to do a lot of good things. They can run programs, they can run promotions, they can go attack the marketplace with that Dell Technologies suite of products.

You're looking for distributors that have that overlap?

What I don't want to do is not even look at it, build my distribution strategy and say, I don't want to work with you, and find out actually that's a hugely strategic play with VMware. I'm building the Dell EMC program and I'm making it Dell Technologies capable. That's how I'm thinking about it.