Dell EMC Fires Sales Scofflaws For Creating Channel Conflict

Dell EMC Channel Chief John Byrne is following through on a promise to terminate salespeople who violate deal registration, and he's using their firings as an example of the company's commitment to the channel.

Dell EMC sales reps can lose their jobs, and partners can be kicked out of the channel program for violating deal registration. Partners said the strict rules of engagement are a turning point for the Dell Technologies culture.

"Having leadership in place that is willing to hold the line is the only way to make a culture change," said Michael Tanenhaus, CEO of Mavenspire, an Annapolis, Md.-based solution provider that works with Dell EMC. "You have leadership in place that is absolutely committed, and a workforce that has different levels of commitment. When you test somebody's resolve, you're waiting to see if they'll react, so it's interesting to see it."

[Related: Partners: Dell Technologies, Salesforce Partnership Could Smooth Deal Reg Rough Spots]

One sales executive for a top Dell EMC partner, who did not want to be identified, said the firings are widely known in the channel and are a huge victory for partners that are going "all in" with Dell EMC to maximize sales compensation of the end-to-end Dell EMC portfolio. He commended both Dell EMC President and Chief Commercial Officer Marius Haas and Dell Global Channel Chief John Byrne for backing up the "zero tolerance" policy. "This is just plain bad behavior and the only way to eliminate it is to act on it," he said.

The sales executive said the use of Salesforce.com is making it more difficult for Dell EMC direct sales reps to violate deal registration. "You can go into Salesforce and see it all, you can't hide," he said.

The focus on and commitment to the channel completes a slow about-face begun about a decade ago when Dell introduced its first channel program. Until then, Dell was a strong proponent of the direct sales model. In its formative years, its program was plagued by conflict between channel partners and direct sales executives.

Today, Dell Technologies claims a $35 billion channel business, and Byrne aspires to make the company "the No. 1 player in the industry."

Shortly after Dell completed its $58 billion acquisition of EMC and Byrne began rolling out the company's new, unified channel program last October, Byrne called deal registration the "ultimate form of protection" for partners, and said the company would have "zero tolerance" for deal registration violations.

Last month Byrne told an audience of some 4,000 channel partners during the annual Dell EMC World Global Partner Summit that "it gave us no pleasure to take action against people internally that violated deal registration, but we did it, and the reason we did it was because of you. You have to know we cherish your investment. We know you have choices. We're going to be looking after you."

"It's like on the first day, you have to put the most draconian set of rules you can think of in place," Tanenhaus said. "The last few years, we're seeing people figure out ways to get around [deal registration]. So they went draconian. No excuses."

Michael Goldstein, president of LAN Infotech, a Ft. Lauderdale, Fla.-based solution provider, has worked with Dell almost since the beginning of its channel program and said he feels more comfortable with its program now than he ever has.

"They really made it right," Goldstein said, "and [deal registration] is a big piece. If you can make an example, that really proves it. It really takes a lot to let someone go for that. Somebody has to be the sacrificial lamb, but it proves that they're following through. The approval process happens fast. They want those deals in place, and it's a much bigger commitment that we've ever had."

Goldstein has seen deal registration shenanigans "less and less," and with its new, strict approach, as well as a more engaged customer base, Dell Technologies has an opportunity to put channel conflict to rest, he said.
Deal registration violations typically happen when a customer gets a call from a direct sales rep offering a deal that's almost too good to be true, Goldstein said.

"But clients are getting smarter," Goldstein said. "If you quote $5,000 and they quote $2,000, there's a catch. There's something you're not getting, but [direct sales reps] take those orders. They're not saying, 'Hey, Mike, this guy wants to buy and I told him they can get 40 percent off.'"