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 Channel Futures

MSP 501


Dell’s Next MSP Partner Moves

  • Written by Joe Panettieri 1
  • February 19, 2010
Sure, Dell is selling managed services direct. But during a phone briefing today, Channel Chief Greg Davis (pictured) and other members of the Dell partner team described how the company plans to continue working more closely with MSPs and VARs that are seeking recurring revenue. Here's an update.

Dell Global Channel Chief Greg Davis for Managed ServicesSure, Dell is selling managed services direct. But during a phone briefing today, Channel Chief Greg Davis (pictured) and other members of the Dell partner team described how the company plans to continue working more closely with MSPs and VARs that are seeking recurring revenue. Here’s an update.

As you may recall, I’ve openly wondered if Dell remains committed to recruiting, training and certifying more MSPs. Yes, Dell’s PartnerDirect team is having success engaging hardware-centric solutions providers; Dell now approves roughly 86 percent of registered deals from certified partners, Davis notes.

Impressive. But does Dell really want to partner up with MSPs on managed services? “We know how important services are to partners,” says Davis. “I made the commitment to ensure that all [Dell] services could be sold to and through the channel.”

Peter Klanian, senior manager for SaaS Global Channels at Dell, points to three of Dell’s MSP-centric priorities:

  1. Supporting partners and giving them the ability to sell their own branded services.
  2. Partner with MSPs to provide Dell project and consulting services that MSPs may not be able to otherwise offer on their own. The MSPs can charge a mark-up for the work, though the have to permit Dell to work directly with the customer on the project.
  3. Move into new markets — beyond basic remote monitoring — to help MSPs exploit new revenue opportunities.

Shifting to SaaS

Part of Dell’s challenge involves MSP partner churn. The company gradually transitioned its managed services platform from an on-premise appliance to a full-blown SaaS solution. During that transition, some MSPs opted to migrate to other software offerings.

Klanian says he expects that churn to end in June 2010, when Dell’s MSP appliances (acquired in the 2007 Silverback Technologies deal) will reach end-of-life.

At the same time, Dell is hiring. One example: Dell recently replaced Todd McKendrick, an MSP-centric partner expert who made the move to Nimsoft in December 2009. “Making that hire speaks to our continued focus,” says Klanian. “We wouldn’t have filled the position if we weren’t sincere about MSP partnerships.”

Direct Debate

Some rivals have openly taken shots at Dell’s direct managed services sales. But Klanian is quick to note that many software companies — such as Nimsoft and Kaseya — are balancing direct and indirect efforts.

In terms of ongoing success, Klanian points to Dell’s work with The IT Pros, a San Diego-based MSP that has won numerous recurring revenue opportunities while working with Dell. One key engagement for the IT Pros involves Mitchell International. And yes, Dell’s MSP offerings are involved in that particular engagement.

Klanian also points out that Dell MSP certification program involves opportunities across Remote Infrastructure Monitoring (formerly Silverback), Managed Print and Dell Desktop Manager (formerly Everdream).

Is Dell taking the MSP market by storm? I don’t see evidence of that. But is Dell committed to working more closely with MSPs? I think Dell answered that question when the company hired McKendrick’s replacement.

Next up, Dell will need to show some progress once the on-site MSP appliances reach end-of-life in July 2010. Even Klanian points out: “At that point, we’ll have a stable base of pure SaaS partners from which to grow.”

Tags: MSPs MSP 501

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10 comments

  1. Avatar Brendan Cosgrove February 19, 2010 @ 10:03 pm
    Reply

    I thought for sure the Kace deal would have come up during your call with Dell.

    Brendan
    Kaseya
    brendan.cosgrove@kaseya.com

  2. Avatar Joe Panettieri February 19, 2010 @ 10:36 pm
    Reply

    Brendan: Thanks for the note. And great point. Two-part answer for you…
    1. Some quick speculation from our sites here.
    2. And a follow-up on Kace-specific details coming next week.

    Thanks for raising the topic. We’ll be back with more details.
    -jp

  3. Avatar Roger James February 20, 2010 @ 2:44 pm
    Reply

    Joe do you believe Dell is sincere about wanting to work with MSPs???

  4. Avatar Joe Panettieri February 20, 2010 @ 3:07 pm
    Reply

    Roger,

    I’ll give you a two-part answer. First, I think Dell is serious about PartnerDirect, the company’s channel partner program. I think the company could do a better job promoting channel expertise from acquired companies (such as EqualLogic) but I do think Dell is sincere about PartnerDirect. And the latest Dell partner sales data looks promising, as TheVARguy.com reported.

    Now, for the second part of my answer:

    I believe most of the PartnerDirect success involves hardware projects and/or hardware reselling. Your question is more focused on SaaS and recurring revenue, I believe. In the SaaS and MSP markets, I think Dell has a lot to learn. Or at least a lot more to communicate…

    For most SaaS companies, the fastest route to market is direct. Look at Salesforce.com as an example. In my personal opinion, when Dell acquired Silverback, Everdream, and other MSP-oriented companies, I think Dell’s first priority was to make sure there were processes and technologies in place to directly reach customers. Now that infrastructure is in place, I believe Dell will spend more time working with MSPs.

    No doubt, Dell needs to communicate more frequently with MSPs. I’ll be watching to see if the company does so over the next few months.

    Sorry for the long answer to your short question.
    -jp

  5. Avatar Tony February 22, 2010 @ 1:36 am
    Reply

    I’ve had a Dell direct rep compete with me on a deal for a customer that I’ve had a relationship for years. He told me that he can get better pricing and that he wanted all quotes I was giving to my client from other distribution channels for any other software or hardware he hadn’t received when working with the client direct. He stated that he had approval to beat my pricing by 5% and that it was best for the client to go through him…he then asked me to verify if I wanted to do “what was best for my client”.

    I was pretty taken back by this and scoff whenever I hear about Dell working with MSPs. The only work they seem to want to do with me is take my customer…as proof on the quotes they email with fancy marketing attachments for professional services and managed services. Even quotes sent to me from the PartnerDirect team…really Dell?

    I know they’re servers are thousands less than some of their competitors, but I’m now willing to cut my margins on hardware sales after feeling so scorned with a company I partnered exclusively with for the past 10 years. I’m insulted with their definition of partnership and what they think of my loyalty over that time.

    I don’t mean to totally hate here Joe, but do you really think there is a PROFITABLE strategy for MSP’s to partner with Dell on services? Or does it make sense that they are leading the charge to the commoditization of our industry?

    Personally, I think they are working as hard as they can to take food off my family’s table in any way they can. They’ve squeezed profitability out of system building and look to do the same with our market….good luck- I’m fighting back every step of the way with greater touch and sincere care for my customers – and guiding them toward different hardware manufacturers in the process.

    Bitterly,

    Tony C.

  6. Avatar ty March 26, 2010 @ 7:41 pm
    Reply

    Having a situation that might turn out like yours Tony. Dell reps requesting we register all our client deals through them and quite a lot of friction as a result of this. Our client information is confidential for a reason and nobody should have access to that information without a judge signed court order.
    Even the sales rep dances around the questions of “why are we required to do this”. Not once have we gotten a straight answer.

  7. Avatar Simon Gold March 31, 2010 @ 7:00 pm
    Reply

    Hi All,

    Glad to hear that we are not the only ones who are experiencing these issues!

    We have had over $75,000 worth of deals snatched by Dell direct account managers trying to under-cut us even though we are certified partners.

    We were assured that this would not happen, but recently things have gone from bad to worse.

    Im really not sure what we can do – Dell dont seem to be interested!

    The icing on the cake was when the Dell direct team sent my client the cheaper quote, alongside the ProConsult PDF saying that they could install, support and maintain their systems for them!!!!!

  8. Avatar Joe Panettieri April 2, 2010 @ 8:54 am
    Reply

    Tony, Ty, Simon: I typically speak with Dell after each quarter closes. So I’ll be sure to raise your thoughts during my next chat with their channel team.
    -jp

  9. Avatar Jake June 18, 2010 @ 3:47 am
    Reply

    I have to agree with Tony and the others. I don’t think Dell’s agenda is to truly work with MSPs. I would be leary of giving my client information out to anyone, let alone any enterprise. I have all my vendors sign mutual NDA agreements if Im sharing client information. If they break that then they will see court.

  10. Avatar Joe Panettieri June 18, 2010 @ 3:58 pm
    Reply

    Jake: I continue to hear good things about the Dell PartnerDirect program, where VARs work on storage, servers, etc. But I don’t hear so much about Dell attracting MSPs to the Dell Managed Services platform…
    -jp

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