Dell EMC unveils next set of new partner program details

Dell EMC has announced the next set of details of its new partner program, after unveiling the tier structure of the program in October (see Canalys report, ‘Dell EMC reveals its new channel partner program’). Its biggest challenge is integrating partners from both Dell’s PartnerDirect program and EMC’s Business Partner Program, which have different revenue thresholds and certification requirements. The first phase of this integration, announced this week, is to ‘status match’ existing Dell and EMC partners within the new Dell EMC program. This means that partners will be automatically enrolled in the new program at the equivalent level they hold in the existing programs of Dell and EMC. In other words, those at the highest level within the EMC partner program – Platinum – will be certified at the highest level, Titanium, in the new Dell EMC program. Dell’s current top-tier Premier Plus partners will also be awarded Titanium status.

This approach excludes Titanium Black level, which is an exclusive, invite-only subset of Titanium partners. Dell EMC is not revealing the selection criteria for Black, but this can be expected to be reserved for the largest, most highly certified partners with the broadest reach across the Dell and EMC portfolios. Those reaching Titanium status will qualify for eligibility for the Black status. Dell EMC plans to start informing Titanium partners who have achieved Black level shortly, but this will be limited to a tiny group of no more than tens of partners worldwide.

Dell Premier partners and EMC Gold partners, meanwhile, become Dell EMC Platinum partners, which is the second level in the program. Dell Preferred and EMC Silver partners will receive Gold status in the new program. Partners that currently participate in both Dell and EMC programs will receive the highest level of the two. The remaining partners without certifications or meeting revenue thresholds become Dell EMC Authorized. Dell EMC plans to provide each partner within the top three levels with its predicted program levels this week, assuming they meet the current requirements within the Dell or EMC programs. Partners that are not on track to meet these requirements will be threatened with demotion under the new program structure.

An interim step

This approach helps with integration in the short term, as it simplifies the initial transition phase for partners from both sides. It does not require them to make sudden and prohibitive investments in training, they will not be forced to meet new revenue requirements in the first year, and it avoids damaging their brand image with customers through an unexpected demotion. During this first transition year, however, status matching will create significant disparity between Dell and EMC partners holding the same tier status in the program, which could lead to some confusion for customers and potential competitive tension. For example, EMC’s current top tier Platinum partners – of which there are roughly 30 worldwide – are required to meet revenue targets of up to US$100 million dollars, depending on region. Dell’s Premier Plus partners – estimated to number less than 100 globally after Dell launched the new tier earlier this year – must achieve just US$5 million of enterprise revenue and US$7 million of Dell client revenue. It is very probable that Dell EMC will avoid this conflict by targeting EMC Platinum partners for its Titanium Black tier. But this is of course an interim step to the far more challenging process of unifying certification and revenue requirements by tier. With a diverse set of partners covering a wide spectrum of products, from client PCs with Dell to complex storage solutions with EMC, this will be a complex undertaking.

Dell EMC will not reveal the new tier requirements until early February, ahead of the new program’s formal launch on 4 February. It will then give partners 12 months to meet these new criteria, making 2017 a transition year for partners. The vendor insists it will be fair to all partners and plans to apply some fundamental principles, including:

• Partners will be recognized for generating high revenue and/or for selling across the portfolio
• Partners will not be unfairly disadvantaged for focusing on either enterprise or client, as long as they generate sufficient revenue – however storage specialists (that don’t meet revenue thresholds) will be required to sell Dell’s servers and networking to reach the highest levels in the program (although not PCs)
• Services attach will be a key measure of partner performance
• Partners will be rewarded for bringing net new customers to Dell EMC and for increasing their share of wallet with Dell EMC across the portfolio

The details of financial benefits under the new program will not be disclosed until February. This leaves partners unclear at this stage about how much profit they can expect to generate, which will be an important factor in calculating their level of investment in the new program. However, Dell EMC is committing to improve the margins for EMC partners (which are typically lower than for Dell partners) while adopting EMC’s best practices around governance and simplicity in the new program – something that Dell has lacked. At the same time, Dell partners will be hoping that their current profitability levels are maintained.

Dell EMC has been successful so far in creating awareness and interest around its new program. It has made attractive promises to the channel about its level of commitment to indirect growth, building the most profitable program in the industry, along with program simplicity and predictability. Partner goodwill is high, as Dell EMC continues to win share in the channel and generate growth opportunities for partners as it shifts more business from direct to indirect. Now comes the difficult job of delivering on those promises.  Disruption is to be expected, as Dell EMC takes partners through the heavy lifting of transitioning to the new program. This will be tolerated, as long as Dell EMC provides good visibility of its roadmap, maintains consistency in its execution and invests in supporting its partners through the transition process. Established channel vendors including HPE, Lenovo and Cisco will seek to take advantage of this period to strengthen partner relationships and regain share. The next 12 months will be critical to success.