Dell Steps Up Enterprise Offensive With Rebate For TechSelect Partners

Dell this week stepped up its enterprise channel march by adding a 4 percent rebate incentive on select enterprise products for distributor Tech Data's TechSelect partners.

The rebate incentive was rolled out for several hundred TechSelect partners by Frank Vitagliano, Dell vice president of Worldwide Channel Strategy and Programs, at Tech Data's TechSelect conference in New Orleans on Tuesday.

The additional 4 percent rebate comes in the wake of a $125 million Dell channel offensive that also includes up to a 4 percent backend rebate on new account sales; a new account sales rep spiff of $250 per new customer acquisition; new AdvantEdge incentives including $1,000 on security sales; $400 on storage sales; $200 on server sales; and $20 on PC sales.

[Related: CRN Exclusive: Dell Channel Chief Cook On Cisco, The HP Split and IBM's Server Exit]

Vitagliano, for his part, said the additional 4 percent is in recognition of the "joint opportunity" between Dell and TechSelect members. "We think it’s pretty compelling, and it’s not the last of it," he said. "We're still working on a couple other things as we go forward because we think this is a long-term relationship."

The TechSelect incentives are the kinds of investments that led to 35 percent growth in Dell partner rewards paid in fiscal 2015 and 50 percent growth in distribution sales.

Vitagliano says roughly 40 percent of Dell's revenue last year, or about $24 billion, came from the channel. What's more, he said, Dell's channel sales were up 18 percent over the last year.

"I think a lot of our growth just has to do with the realization that people now have that we've got an unbelievable set of solutions end to end," Vitagliano told CRN. "I mean, if you look at our product lineup, it's better than it's ever been. Starting with laptops, tablets, desktops, our server line is killer, right up to storage. ... A lot of it is just our products are resonating in the marketplace."

Marty Bauerlein, senior vice president of U.S. Sales at Tech Data, told CRN that Dell has invested heavily in distributors and channel partners to grow the business. "We've definitely seen their commitment," he said. "They have a lot of headcount allocated at Tech Data to help us grow our business, so they're definitely pushing in their chips. ... Having a guy like [Vitagliano] involved at Dell really adds credibility to their strategy as he's a channel veteran."

Eric Barker, network engineer at Integrity Network Solutions, Sheridan, Ind., said he has seen Dell step up its game in both the channel and its products in the past several years. "With the new programs, it's making it a lot easier and gives us a lot more incentive to want to sell the Dell stuff," he said. "There is potential for us to make a lot of money selling their stuff."

Michael Loftis, logistics manager at Destin, Fla.-based CRC Data Technologies, said he is looking at doing more business with Dell. "[Vitagliano] said enough that I really want to hear more," he said. "I wasn't planning on paying that much attention to Dell as far as this event, but now I am. I am really surprised, especially when it comes to the channel growth."

The stability that has come with Dell's $24.9 billion leveraged buyout 18 months ago is paying off, said Vitagliano. "We said we were going to do a number of things and we’ve done them," he said. "Partners are looking at that and saying, 'Well, these guys are pretty stable. They're doing what they say they're going to do. They're making major investments, and they're investing in the channel business.' That's been pretty positive for us, and all of that has been contributing to what's been going on."

PUBLISHED APRIL 22, 2015