Dell to step up on channel financing

AUSTIN, TEX. – Frank Vitagliano has seen it before in the channel.

The cost of capitalizing a solution provider business has gone up and up. Vitagliano, the vice president of channel sales for Dell in North America, told CDN that he has seen this trend for the past seven to eight years.

And, from what he’s seen its becoming more complicated for channel partners and the vendor community as well to fine areas where they can help.

This has led to on-going channel consolidation. Vitagliano is not at all surprised that 14 of the top partners in Canada have either merged with another solution provider or acquired.

Frank Vitagliano
Frank Vitagliano

In his career Vitagliano has tried to develop a better financing system for not just the partners but also customers and the vendor he worked for at the time. The problem seemed to always come down to the cost of building the equipment on a massive scale. Getting to finance that piece was a barrier not just for Vitagliano but other channel professionals in the marketplace.

At Dell World 2015, Vitagliano told CDN that the company really “stepped up” with the Scale Ready Payment solution for the As-A-Service consumption model as well as Dell Financial Services with the Provision and Pay module.

“Essentially it’s a pay-as-you-go model similar to leasing but much more than that. What we are doing is turning Capex into Opex where the partners or the customer purchasing the box lease a portion of it on a monthly basis. They can use as much capacity as they need. A tonne of partners and customers have been asking for it. Someone has to capitalize it so we are doing it with Dell Financial Services,” he said.

What’s different with this strategy is the partner is not on the hook for the equipment and it can all be on Dell paper if the partners want it that way.

For the smaller solution provider Vitagliano said its even harder for them to fund the transition and struggle more than the bigger partners.

“Those regional partners and there are lot in Canada they have the same problem as the Fortune 100: how do I migrate to the cloud securely? And, how do I do this in the most cost effective way,” Vitagliano said.

He advises to get the training necessary and Dell unveiled several new training initiatives at Dell World in areas such as:

•Data Protection;
•Windows Management;
•End point management with Kace; and
•Identity and access management.

In Cloud there will be network security and big data analytics.

With services, Dell will have PS Series storage deployment, SC Series storage deployment and network deployment.

“I don’t want to preach to them because they know the transition is coming to cloud and on-premise to off-premise is changing quite a bit. The days of selling boxes are over and now its about services and how many dollars you can get on a monthly basis for these capabilities,” he said.

He added that there is further complexity in the enterprise and with data centres, which leads to a joint opportunity for Dell and the channel. “But Dell needs channel support in both technical support and solution selling. And, it’s such a hot space in hyper-converged with our partnership with Nutanix and with VMWare EVO: Rail.”

The partner can also get paid by sub-contracting. Vitagliano believes these new financing options will drive more incremental business as it promotes the utilization of the partner’s bench and technical expertise.

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Jim Love, Chief Content Officer, IT World Canada

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