Exclusive: EMC begins channel transformation

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Exclusive: EMC begins channel transformation
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EMC's race to transform itself into one of the top channel-friendly vendors is about to move to a whole new level.

The storage giant is using meetings with more than 3000 solution providers at this week's EMC World to unveil programs that will push sales and services in all but a handful of its top accounts to the channel, while providing partners with new services backed by its global services arm and new non-vendor-specific cloud capabilities.

Even more important, EMC is internally backing up these moves with a strong carrot-and-stick approach to ensure that its direct sales reps are fully committed to working with channel partners.

CRN sat down with EMC's top executives at the company's US headquarters to learn more about the upcoming channel programs and services.

CEO Joe Tucci said EMC's business is growing much faster than the IT industry as a whole, and more than two-thirds of that growth is being driven and heavily influenced by the channel.

"What does that tell you? The channel is incredibly important to our future," Tucci said. "We have changed our stripes."

That does not mean that EMC is turning away from direct sales.

"As long as I’m living and breathing, we're gonna have a strong direct sales force," Tucci said. 

However, Tucci said the move to embrace the channel is not just about increasing EMC sales, but also about making partners successful and profitable so they will drive more EMC business.

"If you're going to call them a channel partner, I want them to be successful," he said. "And I want them to worry about our success. ... And it's a visceral, deep belief.

EMC's approach to direct sales

Today's EMC is not the same hard-charging direct sales company of years past, said Bill Scannell, EMC's executive vice president, Americas and Europe, Middle East and Africa.

A large part of EMC's enterprise and global revenue, and all of its midmarket and commercial business, goes through partners today, Scannell said.

EMC's sales reps like working with solution providers in part because of the financial incentives that are built into their compensation to engage with the channel and in part because bringing in a channel partner early into a deal frees them up to move forward and develop new business, according to Scannell.

Then there's the big stick EMC wields when needed to keep its direct sales reps in line.

"It is a good-size stick the first time, and it is the ultimate stick the second time," Scannell said.

Chief among the changes to EMC's channel engagement is Enterprise Select, a program under which the company is moving all of its existing and future new accounts to the channel, except for a few hundred enterprise accounts that have worked with EMC or that are strategic to EMC, said Gregg Ambulos, senior vice president of global channel sales.

Outside those few accounts, a list of which partners can get from their EMC sales reps, all accounts are opened up to the channel.

Enterprise Select builds on the move EMC made about four or five years ago to automatically hand all SMB and midmarket opportunities to solution providers, Ambulos said.

"The partner has the ability to deliver all the services as long as [they are] certified," he said. "It made this a great place for our partners to establish a good foundation for EMC and work tightly with our sales organisation."

Under Enterprise Select, if an EMC sales team finds a new opportunity, it will engage the partner quickly so it can move on to develop new customers, Ambulos said.

"The bottom line is, there's an existing run rate that we've had before that we're moving over to the channel," he said. "There's an EMC sales engine that's still there. [Our sales reps will] find an opportunity. They have to work it with a partner. We've established that everything has to go through a partner. You can't take the deal direct. The partners get the services."

EMC direct sales reps also get an uplift to their commissions by taking enterprise accounts through channel partners, and an additional uplift for taking customers through partners as part of the Enterprise Select program.

EMC recognises getting its solution providers into services builds incentives for them to do more business with EMC, Ambulos said.

"Services might be 10 [percent] to 15 percent of the revenue opportunity, but 30 [percent] to 40 percent of the margin," he said. "And at the end of the day, it's a way for partners to really establish themselves as the trusted adviser because they'’re doing the design and implementation."

New partner capabilities grid, co-operative services

EMC also has implemented a new partner capabilities grid to make it easier for its sales reps to introduce the right partner to a deal. The partner capabilities grid is a search engine the sales reps use to check customer needs against multiple partners' skill sets and certifications to find the right solution provider early in the sales cycle.

EMC also rolled out EMC Cooperative Services, its first series of services designed specifically for channel partners.

These are based on services developed by EMC Global Services including health checks and performance assessments, and will give new capabilities to partners who cannot deliver those services now, said Jason Mundy, EMC's director of global services marketing.

However, Mundy said, partners had better be prepared to invest in services-related skills before expecting EMC to back them up.

"It doesn't make sense to just give [partners] the recipe of how to do this unless they make the investment in the tools and the expertise," he said.

Under the program, a solution provider engages with the customer to do analysis and gather information related to services, and then works with EMC to develop and implement the appropriate services, Mundy said.

"In doing that, [partners] can maintain the face in the relationship to the customer," he said. "They own the contract. They own the delivery. They own the entire engagement and the relationship. ... In the end, they can scale their services bench without having to make a heavy investment."

Solution providers can either brand the services as their own or they can use the EMC brand. The solution provider sets its own prices for the services.

To offer EMC Cooperative Services, solution providers must be at the Premier or Signature level in the vendor's Velocity channel program, and must show EMC they have competency in the service, including the ability to sell and position the service and collect the appropriate data.

EMC initially plans to have between 12 and 15 services ready to go for partners, including unified storage health checks and backup services around Avamar and NetWorker, and will add more advanced capability over time, including virtualisation and the cloud.

Read on for how EMC is helping solution providers build private or public clouds.

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