Dell defends rebate overhaul

UK channel country manager Paul Harrison says new structure will encourage partners to grow

Dell has emphasised that its new-look rebate structure is designed to turn the screw on under-performing partners while rewarding those displaying growth.

The vendor has brought in "blended accelerators" from its fiscal first quarter which begins on 30 January, rewarding Certified partners depending on how quickly they grow their enterprise business with the vendor.

The changes impact Dell's 60 UK Certified Enterprise Architecture partners.

Under the previous regime, partners earned a five per cent flat-rate rebate for hitting a $100,000 quarterly target on Dell's enterprise kit. An additional two per cent "stretch" rebate was available for those that beat last year's figure by 60 per cent.

CRN understands the flat-rate rebate has now been cut to two per cent with partners able to earn an additional one, three or five per cent if they exceed last year's figure by 15, 30 or 45 per cent, respectively.

Paul Harrison, UK channel country manager at Dell, said: "We had a lot of stability in our rebate programme last year and with our new financial year starting it was an opportune time to make changes.

"They are now tiered depending on how quickly they grow, so there is a real incentive for partners to drive higher levels of growth with Dell."

Harrison argued that it is relatively easy for proactive partners to surpass last year's numbers given the recent introduction of new technologies including KACE, EqualLogic and Juniper to Dell's partner portfolio.

Martin Hellawell, managing director of Dell Certified partner Softcat, said: "It sounds like a bit of a reduction in the pot but it is understandable. Dell wants to encourage partners to grow and that is what rebate schemes are for."

Paul Barlow, managing director of Dell Certified partner Servium, said: "This is good news for us as we are growing our Dell business although the more traditional enterprise partners might not be as happy. It makes good business sense long-term and shows that Dell is trying to grow its channel business."

Andrew Henderson, commercial director at Dell Certified partner Lanway, said: "We are confident of getting 50 per cent growth with Dell and are being very aggressive with them. Having that threshold there will spur us on to do more."

Dell claimed the rebate changes would be net neutral and Harrison said they were motivated partly by partner feedback. "We look at what we want to achieve, and amend and adjust our rebate programme accordingly," he said.