Dell Channel Chief On Taking Share From HP And The Plan To Unify The Dell And EMC Partner Programs

Taking Share And Taking Care

With Dell's blockbuster acquisition of EMC on the near horizon, Cheryl Cook, Dell vice president of global channels and alliances, is leading a channel operation that she says is taking market share away from HP. But Dell's top brass haven't let on who might be chosen to lead the combined companies' channel, Cook said.

She said the company intends to be careful not to disrupt either its or EMC's channel programs or either company's customers as the integration progresses. That integration, she said, will begin in earnest when Dell's fiscal year begins in February, and could take from 10 to 15 months.

What follows is an edited excerpt from CRN's interview with the Dell channel chief.

Where is Dell seeing gains? What competitors are you seeing partners successfully take business from?

We have share-gain aspirations. We have to take it from the competition for us to expand our presence -- we need new business, new logos, new customers. I think we're taking share from HP. We overtook HP in North America, per [market research firm] IDC, in client share for the first time in six years. I think it's still consolidating, to be fair. I think we're still taking share from the decline of the Toshibas and the Acers and some of those other guys. And admittedly, I think the top three of us, Dell, HP and Lenovo, we're consolidating and benefiting from that, but think we're benefiting a little more. We launched some new client competencies, and [the number of] partners who have done the training and gained those competencies are up 37 percent in North America and about 46 percent globally.

Any movement on who will lead the channel of the combined company? Do you know who's going to be in those positions, but it just hasn't been announced yet, or do you not know who those executives are?

I expect the next level of leadership announcements will be made in the coming month, and that'll include channel leadership, division leadership and geographic leadership. The integration team I'm sure knows [who is going to fill those roles]. I don't think anything is final yet, but everybody's working on the structure first and then they'll say this is the leader and put the name in the box. There's a lot of good, thoughtful collaborative work between the EMC side and Dell on arriving at the right structure that serves our customers, and we're going to put in the best talent to lead the combined new company.

We spoke with Gregg Ambulos (pictured) at EMC World, and he told us the program would ultimately look more like EMC's than Dell's. Is that your understanding?

I'd say it slightly differently. What's been consistent with the way Dell has approached any of the other acquisitions we've done is that we're going to look very hard at taking the best attributes, capabilities and structure of both programs and try to make it better. We don't have any desire to disrupt what's effective and successful in their program that serves that high-end enterprise market very well. And we think we've got a really good strength that serves the enterprise, but also our client-volume business, too, so we want the structure to be the best it can be to serve the entire portfolio. Where there's better capabilities in the EMC program, that helps us accelerate our enterprise side of the business, and where we've got really effective, competitive programs in the client-volume side of the business, we're going to do that.

Do you see a scenario where EMC guys have a quota to meet for client products, or will things be separate for a while?

When the transaction is final, which we expect will be maybe as early as July or as late as October, you're going to see us operate somewhat independently until our fiscal year end at the end of January, beginning of February. We have a lot of activity underway. Let's just say the transaction closes August 1 or August 30, what's the experience of the employees? What's the experience of the partners? We can appreciate, even when the magic day happens, they still have their tools, we have our tools. I can't process their orders. So, it'll be a bit of a parallel, independent experience. We are working very much to give good visibility to deal registration, to drive better clarity where we're competing with others and not competing with ourselves. Then, in February when we open the new fiscal year, I think that's when you'll see us bring more unification, both in teams, programs, structures.

What about customer relationships as the integration progresses?

We're going to make sure we look at this from the outside in. We want to serve our customers, we don't want to be disruptive to our customers. We want to make sure the relationships we build and foster with our customer are a differential. EMC excels at that. They build amazing relationships. We build amazing relationships. To the extent we can craft it to serve customers' needs to our end-to-end portfolio, I think that's what you'll see us do.

Are you still looking at about a year before you're mostly done with integrating channel operations?

We're targeting the new fiscal year -- February will be the first expression of where you see us pull everything together. I'll have to get into more specifics on the back end, IT systems and tools. We’re certainly going to leverage technology to make it as seamless as possible, with a common portal and all that as fast as we can. I don't know today as I sit here if that will take us a year, 10 months, 15 months, but we're going to work toward that as prudently and expeditiously as we can. We know we don't want to add complexity for the partners.

Will you change anything about EMC's relationships with distributors? Will you embrace Ingram [Micro], for example?

I envision distribution to still be very strategically important for us today and tomorrow. I will not comment on changing status on who does or doesn't have EMC as we work through that. We'll have to get that together and as combined team work through who serves the business. But I know distribution is strategically important to their business, as it is to Dell. When we combine the companies, we're going to want to make sure that continues to be important, that we put the right programs in place so they continue to give us reach to the partner base, and provide a lot of the value they currently do. There are things that are highly relevant to a high-end enterprise business model. Equally, there are things that are relevant to a PC-volume transactional model, and we're going to make sure we have all the right relationships, programs and capabilities to serve both.

Do you think you'll establish a hard deck, where below a certain amount, or deal size, everything will be channel?

I know EMC has that. We're going to work through that in the integration. Dell very much continues to support customer choice, and we're working on improving and providing specifics around sales engagement and where the partners can play and make more money with us, and we'll continue to drive more clarity as we bring the programs together. But that'll be work to do when the transaction closes.

Do you think you'll be asking large partners to carry quota?

We assign growth targets today in our large partners, whether you call it a quota or you call it a business plan. We do very much advocate doing joint business planning and arriving at objectives and targets, and aligning the incentives and awards to achieving those is commonplace.

Do you anticipate cutting channel reps? Is that an area where there's overlap?

I don't necessarily envision that. I think we've got to go work through where we share partners, where we have the same partners, how we align the coverage most effectively. Depending on the relationship, they're going to potentially expand with Dell. We want to make sure we provide the best coverage and the best resource for them to leverage the breadth of our portfolio. So we're going to want to make sure we provide the right expertise for our high-end enterprise offerings, as well as our volume PC and client. We're going to want to simplify the engagement and coverage. We're going to want to make sure for our customers, as well as our partners, that it's easy to navigate the organization, that they know who to turn to for help and support.

EMC has been cutting back-end rebates. Do you think Dell will stop or reverse those cuts?

I can't speak to the trajectory they've been on. We've maintained for some time that I want to be market-competitive or advantaged to have them want to work more broadly with Dell. We'll continue to look at overall competitiveness in the market, what can uniquely advantage or position the joint offers that a partner might be able to engage or work with Dell on, versus competitive alternatives. You may see some dial up, and some dial down, and frankly we want to challenge ourselves to be innovative. What's the creative opportunity we have to make this the most compelling program for our partners? I can't speak to the things EMC had in flight. The good opportunity will be [that] the new combined company will be a private company. The flexibility that we've experienced in the last couple years after going private gives us quite a lot of latitude to make sure we're smart and fiscally responsible.

You launched some new business incentives earlier this year. How much traction are they getting?

We've just completed our first quarter with which those would've been rolled out. This is also the first quarter where we've really aligned our program around BUs [business units], so there's a client incentive, and an enterprise, and the partners can accelerate independently within those rebate structures, and it's driving a little bit more granularity in our mix. Rebate paths are up 48 percent year on year. Our client rebates are up 95 percent. And specific to software for identity and access management, those payouts were up 150 percent. Specific to new business, in North America, we had over 2,000 partners who received benefits in this new business incentive, with over 1,100 of them eligible for the rebate. Our new business revenue grew by 25 percent.

What kind of channel growth are you seeing?

The overall performance and momentum in the business continues to delight us. We're trying to make sure we maintain consistency, predictability and focus, and we're continuing to see really balanced performance, growth at about three times the market. In North America in particular, we're seeing double-digit growth from the channel, and a pretty balanced perspective across all partner types, our large VARs, our MSPs, as well as our regional partners and distribution. We're expanding thoughtfully in distribution, and that continues to help us, and it's growing still at double digits in North America, as we get more precision in our model.

You've been making efforts around partner engagement. How has that panned out this year?

The number of Preferred and Premier partners we have, and that continues to be at about 4,300 globally. We have strong engagement in our deal registration, and it's been front of mind for us that while we are pleased with the engagement, in Q1, our deal registrations were up in North America 30 percent year over year. There were over 43,000 deal registrations in North America, and globally, it's over 120,000, and global growth is up over 20 percent. I've been on a path of driving global consistency, and a lot of that is in our program, in maintaining deal reg and [service level agreements] with a little more clarity around our sales engagement, and it seems like we're getting in a good rhythm.

Earlier this year, you expanded the reach of your Dell Financial Services arm. How has that been working?

That continues to be an avenue for growth. We had 32 percent year-on-year growth with DFS financing, so it's approaching $1 billion in originated, funded deal value. It touched over 1,800 end-user opportunities.

How long before you hit that $1 billion mark?

I think we're pretty close. I'd say probably when we get into the second half of the year. And that continues to be something we want to make sure we're flexible on. Within our DFS structure, we've enabled some real flexible payment solutions to enable partners to respond to customer requests for different consumption models. So the more we step into these enterprise solutions, and the more they're wanting to buy it as a service, the education and awareness of our pay-as-you-go program, or provision-and-pay or scale-on-demand programs, [the programs] are just getting better understood. People are really learning how flexible it can be, and I think that's a real differentiator relative to what may be in the market from some of our competitors.