Last year’s top newsmaker had a hard act to follow. How could Greg Davis, Dell’s Americas channel chief and former GM of the Canadian operation, top changing the direct vendor’s stripes and embracing the channel? It’s not like he didn’t try.
The year started off well enough. He made a major Canadian announcement in February ushering in the Partner Direct channel program. This was the announcement that the channel was hotly anticipating ever since Michael Dell claimed “direct was a revolution; not a religion.” Of course, the Partner Direct program was met with a lot of skepticism. It was different. It did not offer rebates. The whole model was built on lowering costs across the entire supply chain.
“Our focus is on lowering the cost of doing business in the channel. That is what makes us different than those other channel models of the past, which were based on rebates and sales incentives. When you purchase from Dell you buy customer configured products loaded with software, instead of off the shelf products,” he said.
The vast majority of the Canadian channel stayed away and kept on supporting HP (NYSE: HPQ), Lenovo, Acer,or Toshiba for the most part. Davis, to his credit, stuck to his word and built a channel network one reseller at a time. The Canadian subsidiary currently has about 700 partners on board in Canada.
Things progressed well until April of this year when Dell Canada named its first ever Canadian channel chief Frank Fuser, who was unknown in the IT channel in Canada.
Considered by many to be a Dell insider, Fuser did not work out and he decided to retire shortly after being named to the post.
Davis told CDN at the time that his former co-worker’s lack of channel experience played no part in his decision to leave.
Replacing Fuser was Davis, himself. His plan was to take charge of the Canadian channel operation for the long term, with country manager Paul Cooper lending a hand. “Given that I was president of Dell Canada, I understand the Canadian market,” Davis said.
The Partner Direct channel program did manage to grow the number of channel partners. Currently, Dell has approximately 10,000 new channel partners in total in North America.
During an earlier interview, Davis said that his effort in channel recruitment was “fair.” He said that per capita Dell has done better in Canada than the U.S. Later on in the year, Davis gave himself a “B” grade on the issue of channel/direct conflict in a company sponsored YouTube video.
“We made a bold statement to our channel that in order to be successful our direct sales teams have to be compensated to do the right thing for the customers. Compensation can’t get in the way of doing the right thing. We have a great set of customers who only want to work with Dell direct. We have a whole set of customers who have historically worked with business partners their whole entire existence. Then we have a whole set of customers in the middle. And we can’t let compensation get in the way of that. We still have some work to do there. I would give ourselves a “B” average on that. We’ve done some good things but we have some areas of conflict. Together we are working those things out. We are utilizing tools like deal registration and we are pulling together competencies around training to identify the right partner and for the right deal get them the right pricing. Identify the teams that they worked with and fairly compensate everyone involved,” Davis said.
In that same video, Donna Troy, Dell’s VP and GM of corporate accounts, said she is committed to leveraging the channel in her space. She believes that it will be key to Dell’s growth and that the company’s commitment to a channel neutral compensation model is the most important thing.
Dell watcher Michelle Warren of MW Research & Consulting of Toronto said she concurred with Davis’ assessment.
“The Canadian number could grow more and should be in the double digits. Once that happens it could be characterized as great, now it is just good,” she said.
Warren also believes the certification categories should be better on a North American level. “The partners are waiting to see how Dell responds to them. There is still a period of wait and see going on to build up the trust factor. It will take at least another year before partners move over to the certification area,” she said.
Plans for 2009
As the Partner Direct program reaches its one year anniversary, Davis’ focus is on building more partner competencies inside Dell’s channel network; taking a page from Microsoft’s successful channel program.
For example, the managed services and enterprise architecture certification programs have fewer than 500 channel partners, which is a good start for Dell.
The channel has to keep in mind that Dell’s channel efforts are a work in progress. Davis understands that the program is not where he wants it to be. Patience is still a key element of Dell’s and Davis’ channel journey.