Thread regarding Dell Inc. layoffs

I worked at Dell for a long time, work for an indirect competitor now - I feel like Dell's direct model is almost the only thing that Dell has left as a major strategic advantage over competitors. Sure, there are disadvantages too. But a major shift like what you are describing would be impossibly complicated - assume every sing account is up for grabs if Dell decides to do that.

Unless we want to spiff the F out of our products, like Pure and Vast, the channel won't push our products like we do.

The responsibility still falls on core team to do all the selling, quotation proposal, solutioning, pricing approvals, and funnel updates for channel deals. It creates more work and complexity. Unless the channel bring you the deal, it's just complicated paperwork exercise selling through channel.

@ch Dell's pricing and rebate structure is way worse than it's primary competitors. Constant finance approvals required to just be competitive.

@da So True. There are some truly loyal partners out there. There are some who register deals across multiple OEM's then tell you to "prove it" when you call them on it.

FTC or is it FDT?

The channel offers more complexities and the illusion of customer relationships. You’re not getting much for your money, that’s why they call them ‘strategic’ partnerships.

The channel is a complete wildcard - offering little to no value and ready to undercut you depending on the mood of the day. They’ll pull the rug out from under Dell the moment it serves their interest, and you’re left with zero protection over the business you’ve built.

Dell should at least have lower margin products such as CSG and servers flow 100% through the channel esp for medium business and low end enterprise customers. DTS I can see still having direct reps due to global nature of the business.

@c0 Dell's channel first strategy was always half-baked.

Eliminate direct sales teams with the exception of the top 100-200 customers and focus it into channel sales teams and better self serve tools.

@b0 Math, though I assume he is referring to net operating profit vice product margin.

Dell's biggest problem with their sales orgs is the number of people who retire quota on a sale.

For instance, selling a PowerScale array to a Federal end user via an Integrator through a channel partner looks like this:

These are some, but not all of the people who retire quota:

End user team:
ISR, TSR, AE, DCAE, DCSE, Pre Sales, UDS AE, UDS Pre Sales. all of their managers/directors. all of their directors/VP's, etc

Integrator team
ISR, TSR, AE, DCAE, DCSE, Pre Sales, UDS AE, UDS Pre Sales. all of their managers/directors. all of their directors/VP's, etc

Channel team:
ISR, TSR, AE, DCAE, DCSE, Pre Sales, UDS AE, UDS Pre Sales. all of their managers/directors. all of their directors/VP's, etc

All of those people retire quota, despite the fact that in all likelihood, only 2-5 people actually touch the opp.

Eliminate two of those three teams, pay out the VAR what one of the teams would have retired, Dell THEORETICALLY increases its profit margin on that deal by 30%.

Someone give me a successful Partner story other than Dell putting it on Partner paper with a bit of margin for the Partner.

I thought we already did this, or said we did, and it failed fantastically. Channel-focused means you dedicate resources to supporting and enabling the channel. Well, right after we switched to a more "channel-focused" strategy, we cut our channel teams to the bone.

It also means you've built fantastic relationships with your channel partners and they look to your products first. Well, I hate to say it, but many/most of our partners will gladly sell a competitor's product just the same, and often do.

Not good for margins, at all.

zzzzz

How will profit margin increase? You will save cost from reduced sales headcount but you will need to give a cut of your margin to channel partners. Channel partners always pitch whatever solution maximizes their own margin on the deal, so you will need to give them a big cut.