Amy Katz (my business partner) and I have completed our trip to the CompTIA Breakaway conference. Amy noticed a rather interesting trend that I had overlooked: During all of our Breakaway meetings, executives from across the managed services market asked us about our thoughts on Dell.
Some of the questions were basic (“Do you trust Dell?”). Others were complex (“How will Dell marry cloud computing, SaaS and managed services?”). But all of the questions involved some sort of lingering vendor distrust of the PC giant.
So, what do I think of Dell? My views on the PC giant aren’t always popular. But I stand by them. Take a look.
First, let’s sum up Michael Dell’s mission in three words:
“Increase Shareholder Value.”
Michael needs channel partners and managed service providers to help Dell fulfill that mission. As a result, I truly believe Dell is working in good faith with MSPs and VARs — and has no hidden agenda to stab them in the back.
Will Dell make mistakes? Absolutely. But will Dell listen closely to partners and continually evolve? I believe so.
I have some other core Dell-centric beliefs, based on interviews with key sources close to Dell. Here they are:
- The Ultimate Master MSP: In the managed services market, Dell’s core goal is to become a master MSP, allowing VARs to leverage Dell’s network operation centers (NOCs) and hosted software. Watch for that strategy to unfold later this year.
- Partner Rally: Dell will continue to host regional events across the world for VARs and MSPs. But I’m convinced the company will do something bigger — perhaps an annual partner event — for VARs and MSPs in 2009 or 2010.
- Storage in the Clouds: Somewhat similar to Amazon.com’s S3 (Simple Storage Service) strategy, Dell will make a deeper move into hosted, on-demand storage.
- MessageOne: Most MSPs focus on Dell’s Silverback and Everdream acquisitions. But don’t underestimate the MessageOne deal. Dell will begin to blend MessageOne’s email service capabilities with its other managed services.
So, what do other people think of Dell? It was difficult to get rival technology companies to go on the record. But here are paraphrased samplings of what I heard, with generic descriptions of the sources:
- From A Distributor: Dell doesn’t quite understand what it acquired when the company purchased Silverback. And the MSP platform has languished a bit A so far under Dell. My Reaction: I disagree. I sense that Dell has a clear set of goals for Silverback, Everdream and MessageOne.
- From An Outsourcing Specialist: Dell’s managed services strategy makes sense but the company lacks face-to-face on-site services required for small business success. My Reaction: I agree fully. The company will need to partner up to keep SMBs happy.
Love Dell or hate Dell, everybody has strong opinions about the company.
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Joe, I dont think you can underestimate the effect of the guilty verdict against Dell Financial Services for fraud on partners and VARs opinions of them. If they steered their clients into one of these fraudulent programs, then the partner was likely hurt worse than Dell itself due to the combination of their smaller size (after all if you want a Dell you go to Dell or a Dell partner) and the fact that the partner is in closer contact with the client who was defrauded. Its a credibility killer for the partner.
Stu: Constructive criticism is always welcome on this site. I realize there are a range of opinions about Dell out there. I’ve pinged Dell to get their perspective on the potential financial services issue you mentioned. I need to confess: I’m not familiar with the alleged issue you raised. Can you offer any more background? And I hope Dell will weigh in, too. Thanks.
Stu,
Dell disagrees with the legal decision you reference, and will defend our position vigorously. As a matter of practice, we don’t provide specific comment on matters in litigation, but our goal has been, and continues to be, to provide the best customer experience possible.
If you have an issue with your own experience, we want to hear about it so we can help resolve it quickly and to your satisfaction. Our company has opened up several lines of communications including a website called Ideastorm http://www.ideastorm.com for direct customer feedback.
We sincerely want to hear from you so we can continue to make our products and business better and to keep driving improvements for our customers.
Thank you,
Joe, Dell Financial Services (a joint venture between Dell and CIT Commercial Finance) was found guilty in a NY State Supreme Court of fraudulent and deceptive practices in their lease/finance contracts and in the advertising of those contracts. So you can see how that would be bad for Dell but as bad or worse for their partners who put them in those agreements. I found the article on the verdict on ChannelWeb (www.crn.com) by Scott Campbell. I have the whole article if you’d like to see it with quotes from Judge Teresi who ruled on the case.
APaxton, first off I appreciate you stepping up and not just running away to hide about it. I think its good if the company disagrees that you appeal it. You have to agree that it looks bad for Dell and the partners in the court of public opinion (at the very least) even if the fraud claims are disproved on appeal. Any client who was put in one of these agreements and feels defrauded (whether they were or not) is going to complain both to you and to the partner who steered them there. Its much more dangerous for the partner though who has much more contact with that client and hurts their cred much more than it hurts yours. I am not a Dell customer or partner and have no firsthand knowledge of what has gone on. I only copied the reporting due to my interest in commercial finance matters…..
I don’t know the particulars of the suit but it sounds a lot like what we got caught in at a previous firm.
Last year Dell reps were setting up existing SMB clients as new ones. When I didn’t get our SMB rep by phone I was told “he’s moved to the large business dept, how can I help you”. This happens fairly often in the SMB world so not uncommon. By default our invoice came with a contract to sign, “new standard policy for all purchases, just sign it and as long as you pay by x date then disregard the finance terms since they don’t apply. I can change it to plain 30 days or take your credit card but I have to create a new quote and you won’t have it until tomorrow.” I was a bit suspicious, we had never done a lease or asked for a lease, but OK, more flexibility for payments and it will ship a day sooner.
We sent the payment to the address we had always used & Dell cashed it. We didn’t know anything was amiss until we started getting invoices for leases we didn’t sign up for. Turns out we had been setup as a new Dell client with new account numbers. We paid Dell, but were supposed to pay CIT, and Dell never paid CIT. As you might imagine much fun had by all to get it straightened out.
This happened to our firm and several clients that had Dell accounts. I don’t know the internal story but as a customer it appeared that Dell changed it’s compensation in a way that motivated it’s rep’s to aggressively create new accounts and create lease transactions. If it had been done well and with transparency it could have helped clients by providing another financing option. The way it was done just makes me distrust Dell since now I assume any change is in Dell’s rather than my best interest. They also seem to have received a slap on the hand and some fine publicity with the suit, karma? YMMV.
A few months ago Steve Burke from Channel Web wrote the following:
“Lester Keizer, CEO of Connecting Point, said he decided to give Dell a “chance” to prove its claims of being a born-again channel convert. Step one for Connecting Point was registering a deal on a government bid. “I decided to give Dell a shot,” Keizer said. His deal was accepted but then rejected later when Dell direct entered the picture, he said. Dell direct ultimately took the deal and Connecting Point was left out in the cold.
At the recent Everything Channel XChange conference, Keizer met over breakfast with Dell Channel Chief Greg Davis to try to get the matter resolved. He said that Davis has pledged to make it right by giving the commission portion of the deal to Connecting Point. “I’ve still got to see the check,” Keizer said. “Greg has told me he will make it right. He gave me his word. I trust Greg, but I don’t trust the organization. … But he is fighting two battles. The biggest battle is not here. It’s the internal battle back in Austin.”
Keizer is one of many solution providers watching to see whether Davis has the political muscle to transform Dell into a channel organization. It’s ultimately going to come down to whether CEO Michael Dell is truly committed to making the direct giant a channel power. That means telling thousands of Dell direct reps to stay out of an account if a channel partner has staked it out or risk being fired.
Davis confirmed he has spoken with Keizer about the channel conflict issue. “If I make a mistake, I’m going to make it good,” Davis said. He said the Dell direct registration didn’t initially show up and, as a result, the company has “identified it and fixed the process so I don’t have it again. But in terms of commitment I haven’t had any issues where the general managers across our direct business aren’t committed to enabling me to deliver that commitment. It is just a process of learning.”
Since this article was written above, I have followed closely the Channel journey of Greg Davis these last few months. I don’t doubt his sincerity. I think if anyone can pull it off, Greg can. Even after losing more than a million dollars from Dell going direct to a customer of ours, I am willing to give them another chance. Greg, if you are reading this I am still waiting for your guys to call me on a potential partnership here in Las Vegas as we discussed a few months ago. Actions speak louder than words! Call me,you have my number!
Hey Lester: Generally speaking I give Dell the benefit of the doubt in the channel. But when specific examples like yours pop up, it certainly explains why some VARs and MSPs remain wary of Dell. I’m regularly in touch with Dell sources and will remind them that they should be in touch with you directly.
Lester,
Thank you for your comment and support of Greg’s direction and leadership. Since Steve’s article was published, I think the industry has tapped into both Greg and Michael to further understand how serious Dell is about the Channel.
In regards to your situation, I have contacted Greg about your comment and you should hear from him shortly.
Thank you for your partnership,
APaxtonatDell
Channel Community Manager