Tough Economy Pushing Dell, Other Vendors to Commit to ‘Partner-First’
“The message couldn’t be clearer!” – we get the industry reaction to the likes of Dell investing in partners for the long haul.
![Partner-first strategy for Dell and others Partner-first strategy for Dell and others](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/blt1f1474667d0d9d7c/6523ea8e96824a4508cfbf38/1-Foam-Finger.jpg?width=700&auto=webp&quality=80&disable=upscale)
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WorkSpan chief partner officer Chip Rodgers said the switch to Dell’s partner-first strategy has received a strong reaction from partners. This is due to the “one-two punch” of a RIF [reduction in force] in Dell’s direct sales force, while adding new incentives to push the sales teams to co-sell with partners.
“The message couldn’t have been clearer!” he said. “It was an eye-popping, concrete recognition of the shift from traditional partnering as ‘resellers’ to modern partnering where companies are co-selling with their ecosystem partners.”
Kenneth Fox is CEO of partner enablement software company Channel Mechanics. He said there has been a significant acceleration of investment in the partner ecosystem over the past six months.
“The technology companies we partner with now have a very clear strategy to grow revenue and reach new customer segments through their partners. There is a very clear shift towards an indirect sales approach,” he said.
On LinkedIn, Canalys’ Jay McBain said it was “a glimpse into the next era of partnering within a difficult macro environment.”
“Partnering provides a force multiplier for vendors,” wrote McBain. “The realization that the $4.7 technology market is 73% partner-led and over 90% partner-assisted is driving them to shift into partner-first market strategies.”
“Coinciding with a reduction in its own force … Dell is putting significant trust in its partners to act as a primary business engine for its storage products. Dell’s partner base will appreciate this opportunity,” said Andreas Storz, senior research analyst, EMEA partnering ecosystems at IDC.
“However, success depends on clear rules of engagement, consistency and transparent criteria on how individual partners are brought into deals. Partners will also depend on significant enablement to capitalize on their expanded role.”
Storz’s colleague, Stuart Wilson, senior research director, EMEA partnering ecosystems at IDC, believes traditional ways of classifying channel sales are being challenged.
“The very essence of ‘direct’ and ‘indirect’ terminology is challenged by new ecosystem models and the move to as-a-service consumption,” said Wilson. “If a vendor introduces a 100% partner-attach policy, does that classify as an indirect model because a partner is involved in every deal – even if that is only from an influence or services provision angle? Or does a true indirect model require the transaction revenue for the technology product or service to flow from the customer through the partner to the vendor? These are the complexities of new ecosystem models that vendors must now consider.”
Wilson maintained that when a vendor injects clarity into a go-to-market approach it can increase energy, eliminate potential points of friction and accelerate collaboration.
“You reduce the potential for conflict within the model,” he said. “By embracing an indirect model, vendors can reduce their own cost base in terms of direct sales resources, but there is an additional cost incurred to reflect the role of partners in more deals.”
Paola Doebel, SVP & managing director of North America at Ensono, weighed in with a Dell partner perspective.
“We have a strong Dell partnership and this announcement continues to give us confidence in their approach and strategic direction. As client needs grow in complexity, Dell’s focus on partners will deliver innovation and capabilities in unique and varied ways to meet those client needs.”
William Carver, general manager, desktop and enterprise at Titanium Black partner SCC, noted that all the key enterprise storage players already work well with the channel. To some extent this is Dell “normalising” their go to market, he said.
“It’ll mean other vendors having to work harder to retain channel loyalty. Dell’s technology is impressive; their channel teams are highly effective and the rewards significant,” said Carver. “Given the recent restructuring inside Dell, and the announcements around headcount reductions, I suspect some of this is about cost and some about the sheer complexity and breadth of capability customers need to deliver projects.”
Carver said that the days when customers wanted to just add X amount of storage to an array are long gone.
“Now it’s about workload placement, orchestration, automation, security and multiple landing zones. A technology producer like Dell can’t easily cover that breadth in house and needs to leverage a capable channel. As HPE, IBM and others recognized some time ago, why would you have all the cost of a direct sales team in a complex, hybrid cloud market when you can leverage hundreds of channel sales people much more cheaply?” he queried.
William Carver, general manager, desktop and enterprise at Titanium Black partner SCC, noted that all the key enterprise storage players already work well with the channel. To some extent this is Dell “normalising” their go to market, he said.
“It’ll mean other vendors having to work harder to retain channel loyalty. Dell’s technology is impressive; their channel teams are highly effective and the rewards significant,” said Carver. “Given the recent restructuring inside Dell, and the announcements around headcount reductions, I suspect some of this is about cost and some about the sheer complexity and breadth of capability customers need to deliver projects.”
Carver said that the days when customers wanted to just add X amount of storage to an array are long gone.
“Now it’s about workload placement, orchestration, automation, security and multiple landing zones. A technology producer like Dell can’t easily cover that breadth in house and needs to leverage a capable channel. As HPE, IBM and others recognized some time ago, why would you have all the cost of a direct sales team in a complex, hybrid cloud market when you can leverage hundreds of channel sales people much more cheaply?” he queried.
Dell Technologies recently announced it was adopting a partner-first strategy across its storage business. This has been viewed as a potential game changer for the company, and a signal of Dell’s commitment to the channel.
A growing number of vendors are embracing a partner-first strategy during the current economic turbulence. Instead of doubling down on a direct strategy and cutting support to the channel, more firms are investing in partners for the long term.
EY published a CEO study last year about the growing trend of ecosystem partnering. It showed high performing ecosystems drive more than double incremental revenue growth with one-and-a-half times cost reduction.
WorkSpan’s Chip Rodgers
“Pretty stunning numbers and clearly Dell leadership is taking it to heart,” noted Chip Rodgers, chief partner officer at partner management platform WorkSpan.
It appears Dell – and other vendors – are embracing the old proverb: “If you want to go fast, go alone. If you want to go far, go together.”
In the slideshow above, analysts and channel experts weigh in on what the shift to a partner-first strategy means for the channel.
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