On The Record With Robert Cohen & Dell's Greg Davis 15 November, 2009 By Robert M. Cohen

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Name: Greg Davis Company: Dell Title: Global Channel Chief BIO: Greg Davis is Vice President and General Manager of Dell Global Commercial Channels, the first Dell executive to serve in this pioneer role. Dell Global Commercial Channels is a new organization that serves to orchestrate the continuing globalization of PartnerDirect, Dell's partner program that is committed to the growth of Dell's business through partners globally. Personal Favorites: Movie: Jaws Book: not sure if I have a favorite book. Song: I have 2 children ages 12 and 10. I listen to what my 12-year-old daughter listens to. Thus, I guess her favorite songs are now my favorite songs. Restaurant: Moonshine in Austin. Sport to watch: basketball & Miami Heat Sport to play: basketball through junior college. Still play on a weekly basis Food: Pizza out by the pool with my family Super Hero: Superman Villain: Joker from Dark Night IT company: has to be Dell Non-IT company: 4 Seasons & because they provide great value IT industry CEO: Michael Dell & he is a tremendous visionary and great industry leader Other Favorites: To have a Ferrari someday but for now, I love to get out on a nice day in my 1969 convertible corvette.

As such, I have always watched Dell closely. I have marveled at their ability to track results and all the metrics they follow. I love the way they usually stay a step or two ahead of their competition. Still, I always questioned why they fought the channel. Naturally, when Dell launched its channel program, PartnerDirect, I was interested to see how they would do.

However, it was the flurry of responses to a discussion on the Trusted Business Advisor Linkedin Group that encouraged me to meet up with Greg Davis, Dell's Global Channel Chief. The discussion was about the role of the VAR, Dell's personal touch versus VARs, and why Dell can never compete in the SMB space against a VAR who has transitioned into a Trusted Business Advisor. I agree with all of these points. Still, the fact remains, that while VARs do not think Dell can steal their customers, they seem to think that nonetheless, Dell wants to steal their customers.

My message a day later to Greg was simple: I explained to him that I received a lot of negative and few positive responses to my blog and I wanted to hear his responses before I turned the blog into an article. It was immediately clear to me that Greg's first priority was to find out what the negative responses were, who made them and how he could respond to each one on a personal level.

I was very impressed.

Robert: I communicate with over a 1,000 VARs every year. Some of them love Dell and you seem to be gaining fans. However, a lot of them hate Dell, claiming that Dell is not an ethical company and that Dell cannot be trusted.

Greg: Overall, we are making great progress. Trust is something that has to be earned over time. The feedback we received from the channel was that we had to earn trust. Doing things like a deal registration program has shown the channel that we are taking our relationships with them very seriously.

In the first year, we had over 25,000 deals registered with 70% approved for the partner. We compensate our sales team for working with channel members in their territory. Partners who are giving us a chance are getting good response from us and it is getting better.

Building trust between Dell and the channel was our #1 concern. We think we have come a phenomenally long way but still have a distance to go. When we make a mistake we go back to the partner and make it good & somehow.

Robert: Is it true that in almost every sales opportunity with Dell products, the end user can go direct to Dell for less?

Greg: We have never stolen a customer or undercut a VAR. Pricing to a VAR is based on lowest price at Dell.com that day and then they get a discount on this price. For large clients we go direct but VARs can protect themselves through the deal registration program. We participate in larger deals with VARs and do special bids with special pricing.

Robert: John W. Harmon, Ph.D., owner of Computer Solutions of Marion, LLC out of Johnson City, Tennessee says that "In almost every sales opportunity with Dell products, we find that the end user can go direct to Dell for less. What kind of incentive is that?"

Can Dell steal customers from a VAR?

Greg: First, it is a myth that anyone owns a customer. We all have to compete to win a customer and to gain the trust of our partners. We have to work to win the customer every day. Many customers rely heavily on their Trusted Business Advisor. Nobody can steal that away if the partner continues to provide that value.

Robert: It is pretty much impossible to protect VARs if you have no idea which jobs they are working on and whose product they are planning on using.

Greg: If they do not register the deal we can end up competing.

Robert: What are the ingredients of your best VAR partners?

Greg: The VARs that enjoy the most success with Dell are those that have moved from being a seller of products & to providing their customers with a lot more value add. They sell solutions. They are experts in a few specific solutions. Collectively we win together. Most of the sales are to SMBs and public companies. They do a pretty good in the enterprise space. They are "Trusted Business Advisors" to their customers. They are focused on a specific set of solutions. They pick their spots. We want to be the partner of choice for these partners.

Robert: Dan Ross, Executive Director of the Entrepreneurs Forum of Greater Philadelphia and a 33 year veteran in the IT industry, commented in the discussion groups about the premise that VARs need to be solution providers, saying: "In reality, at some point, VARs may want to stop being VARs. That is, reselling becomes a distraction from the value added component of the business. The original premise was that VARs would provide a total, turnkey solution, including both hardware and software support. That also meant maintenance. At best, you should use reselling as a way to deflect price competition away from your services. I must add that this discussion regarding Dell has been going on for 30 years in the IT industry. Before Dell, it was IBM, Compaq, DEC, DG, vendor de jour. Not to mention distributors competing with their resellers." Do you agree with this?

Greg: Yes. VARs who still sell a lot of hardware are having problems because margins are not there like they used to be. We feel that they should be selling services and using our hardware, etc., to help them deliver the solution.

Robert: What is the role of your distribution partners?

Greg: To provide Dell with extended reach into the VAR community. They also provide another line of credit which is so important in today's economy. Partners like to work direct with Dell but sometimes they want the quick delivery that distributors provide on fixed configuration products.

Robert: What role does DellWare play vis-à-vis channel partners?

Greg: You mean our software/peripheral business. It provides another way that VARs can use Dell to help put together parts of the solution. We provide VARs with integrated solutions at the factory level. Other vendors can only do it through distribution as a second-stage solution. This increases the cost due to having to open boxes, etc.

Robert: As Dell gets more and more into managed services, gets special pricing for Microsoft products, etc., will the temptation for going after your resellers' customers grow?

Greg: No. We support the VARs through the Silverback program. We have increased the number of partners working on that platform. Partners can sell this platform and make good money doing so.

Robert: How would you sum up Dell's progress with the Channel?

Greg: We have taken great strides in gaining the trust of the channel. We have about 50,000 VARs globally signed up with us and this number is growing at 30 - 40 new partners per day. About 1,600 of these channel partners are certified with us. Clearly we are making headway in terms of showing value to the channel and making them feel comfortable that we are serious about working with the channel.

Robert: Brad Kowerchuk from Bralin Technology Solutions says "Michael Dell spent far too many years telling the world that they did not need the channel for me to believe he values us now." What are Dell's next hurdles when it comes to the Channel?

Greg: We need to do more to enable and certify our partners around Dell solutions. We need to migrate more of our partners to managed services. We need to see more of our partners promoting solutions and selling Dell as part of the solution.

Customers ask for Dell. They are comfortable buying Dell. VARs like the customized solutions we offer, the drop shipping and the quality of our products. We need to make our partners feel more comfortable buying from us. We need to make them trust us.

Robert Cohen, a passionate and enthusiastic channel advocate, is the founder of the ChannelLine Advisory Council as well as president and business editor of Integrated mar.com, publishers of Channel Advisor, eChannelLine and ConnectIT. Since 1980 he has worked with 350 IT vendors, distributors and resellers in developing and implementing strategic go-to-market programs, using a variety of direct, channel and hybrid models. Integrated mar.com, in conjunction with Robert has created the Trusted Business Advisor program.

Robert can be reached at 1-800-465-2059 or by email at rcohen@integratedmar.com.