The Dell trust factor

Many vendors consider partnering with solution providers to expand client reach, and move products into new markets.

Within Canada, due partially to the geographical expanse of the land, and the significance of the relationship sales experience, partners play a big role in the success of PC hardware organizations. To establish a successful relationship between a solution provider and a vendor, however, it is similar to getting married. Trust is the key factor, which must be addressed continually.

On December 5 of last year, Dell (Nasdaq: DELL) announced its solution provider partner program. The Canadian subsidiary followed suit on Feb. 12 of 2008. As the largest vendor to historically stay clear of channel partnerships, this move was widely speculated, anticipated, and also feared. It was “speculated”, as Canadians have oft realized the significance of the relationship sales process. It was “anticipated”, as some have felt that Dell’s “unofficial” program needed validation. And perhaps most importantly, it was “feared”, as the industry didn’t know what to expect, and as a result has multiple questions. How would it be accepted? How would it vary from programs available from other PC hardware vendors? How would customers react? How would current PC hardware vendors react? How would partnerships be affected?

And let’s not forget that moving into this sales model is a big step for Dell, as well. A lot rides on the successful execution of its partner program.

As of April 2008, the relationship is still young, and perhaps it is too soon to reasonably assess it from this angle. However, some of the steps Dell has undertaken provide a valuable lesson for solution providers and vendors alike.

Part of Dell’s initiative to reach into the Canadian solution provider community was:

Establishing a partner web portal;

Deal registration; and

A certification program for vendors willing to undergo product certification.

Underlying the partnering initiative is the task of building trust among the current and potential solution providers. Prior to this initiative, Dell had been the enemy of solution providers. Its direct model disrupted the previously established sales cycle, not to mention the pricing model. It eroded profit margins, and permanently changed the industry. In order for Dell to succeed in the channel, it is paramount that it earns and cultivates trust amongst the delicate relationships with its partners.

In the midst of building this critically important trust with the partners, Dell is reducing its workforce, by 10 per cent or roughly 9,000 employees. This figure is part of a work wide reduction, not just Canada.

Undertaking this transformation is not an easy task, and undergoing it while reducing staff counts, makes it more challenging. So, how is it going? According to the numbers, Dell has done pretty well. More than 600 Canadian partners have signed up, and more are interested in the certification process. The real test stands in time. Six to twelve months from now, what will the numbers look like? That will be the time to more accurately evaluate the success of the program. At first blush, so far, so good.

Michelle Warren is a senior analyst and long time Dell watcher for Info-Tech Research Group of London, Ont.

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