Dell moving towards distribution

Frank Vitagliano, vice president of global channel strategy and programs

Frank Vitagliano, vice president of global channel strategy and programs

For the first six years of its PartnerDirect channel program, Dell has not been much of a player at distribution in North America, preferring instead to predominantly ship product direct to its resellers. But along with other changes to the company’s channel program in recent months – a new global channel chief, and a new internal structure – there are signs that policy is changing.

Global channel chief Cheryl Cook has recently promoted former North American channel sales vice president Frank Vitagliano to the new role of global vice president of channel strategy and programs. And Cook told channel media during a briefing at the company’s Power To Do More tour stop in Toronto that one of Vitagliano’s biggest jobs in his new role is to ramp up its presence in distribution.

Dell is no stranger to distribution. The company works more extensively with distributors in Europe and Asia. And many of the company’s acquisitions over recent years – Sonicwall and Wyse in particular – use distribution heavily. But here in North America, but here in North America, its efforts have been significantly less profile. At the launch of its partner program, the very PartnerDirect name suggested distribution wasn’t necessarily priority one. Shortly after the program launched, it announced plans to work with Ingram Micro and Tech Data on a select few high-volume SKUs, but by all accounts, very little came of that initial bit of action.

Vitagliano told that working more closely with distribution around the world is consistent with its overall strategy of lettings its customers – and now its partners – “buy the way they want to buy.”

“Distribution is a major part of our strategy going forward because our customers are telling us it has to be,” he said.

Currently in Canada, Dell works with Ingram Micro and Tech Data on its Wyse and SonicWall lines, and Vitagliano said those deals will be extended first to cover Dell’s client computing devices, and ultimately much of its enterprise products lineup as well.

Industry-wide, between 75 and 80 per cent of channel hardware and software transactions are done through a distributor. But Vitagliano admitted that in North America, that percentage is flipped, and Dell currently does 15 to 20 per cent of its channel business through distribution. But the executive surmises it will be easier to go from a company that primarily sells to its partners directly to one that sells equally to partners directly and through distribution, than it would be to make the same transition coming from the other direction.

“It’s a lot harder for our competitors to go the other way, because they have to add investment that’s net new, whereas that same investment is built into our model,” Vitagliano said.

The cost of working with distribution, he said, is offset by both the value they provide, and by increased productivity of channel sales resources that are able to shift from order-taking to more proactive sales role with partners when distribution picks up much of the logistics and other capabilities.

Dell chose wisely in having the effort spearheaded by Vitagliano. A channel veteran, he is still spoken of fondly in distribution-sponsored solution provider communities, where his early appearances at VentureTech Network events as an IBM channel executive are warmly recalled. He has the connections, and he has an appreciation for the role distribution plays and how that role is evolving. He said his goals in working with distribution do not involve outsourcing coverage, something he wants to keep in house. Instead, he said he sees value in distribution in terms of its ability to get Dell into new markets, and in front of solution providers not already part of the company’s PartnerDirect program.

Case in point: the company is sending no less a name than founder and CEO Michael Dell to keynote Ingram Micro’s first-ever IMone event next month in New Orleans, a chance to make the case for PartnerDirect into more than 1,000 solution providers from various Ingram Micro-sponsored partner communities.