Dell Technologies Rolls Out Financial Assistance for Partners and Customers

Adequate cash flow is always crucial to business sustainability—and even more important in the face of COVID-19 and the havoc it is wreaking on businesses and individuals.

Dell Technologies recently announced $9 billion in special financing to help its partners to weather this storm. Many of Dell’s partners are small and medium businesses (SMBs) themselves—and many more provide sales and support to SMBs around the globe.

Impact of COVID-19 on SMB Technology Spending

There’s little doubt that the virus is severely hampering SMB businesses. When SMB Group surveyed SMBs in the last week of March, 75% reported that COVID-19 was negatively impacting their businesses, and 60% expected that their revenues would shrink by 30% or more over the next six months.

As a result, SMBs are looking to preserve precious capital and cash flow through employee and contractor layoffs and reduced hours, and by cutting spending on non-employee related expenses by an average of 37%.

However, some spending categories are faring better than others. SMBs are most likely to plan to maintain spending on business software and telecommunications—the products and services they need to engage and transact with customers, employees and partners, and to introduce new services geared toward serving customers in the current “stay at home” environment.

Providing Partners with Support to Ease Cash Flow Concerns and Gear Up for the Future

In FY20, $52B of Dell Technologies’ orders revenue went through its channel partners. Since many of its partners are SMBs themselves, Dell recognized they might need help with cash flow to keep employees on board, adapt their sales and service models to the new realities of social distancing, and best serve their customers.

To this end, Dell has stepped forward with a number of financial relief programs to help partners maintain cash flow, build new capabilities, and ensure business continuity for the future.

For Platinum and Titanium partners, Dell is providing a one-time cash payout for up to 50 percent of current partner Market Development Fund (MDF)/Business Development Fund (BDF) balances that partners can use for future marketing activities. Partners can apply for this at any time between April 13 – June 20, 2020. Once approved, Dell sends partners immediate payment, helping partners to free up cash flow.

In addition, Dell is waiving fees for Services Deployment training for Unity XT, VxRail and DP4400 from now until May 31, 2020, to help all metaled partners build new skills in these areas. So far, over 2,500 partners have registered for this training. The company is also introducing new team-based pricing options to make training more cost-effective for teams.

Dell is helping distributors with earnings predictability by removing their client solutions growth targets and increasing base rates for the first half of Dell’s 2021 fiscal year. The vendor has also extended the expiration dates for unspent earned MDF and BDF credits that were scheduled to expire between March and July to July 24, 2020.

Dell is also providing partners with extra benefits through Dell Technologies Working Capital Solutions, (WCS)such as faster payments, extended repayment terms. The program currently supports more than 1,500 partners across 74 countries, provides resellers and distributors with working capital via Dell’s preferred financing vendors, and according to Dell, the most favorable payment terms in the industry.

Dell Financials Services Offering Partners and Customers More Flexibility

Dell Financial Services (DFS) has been a leader in technology payment solutions for the last 22 years, and a pioneer in flexible consumption solutions for the past 14 years. In FY20, DFS loan originations totaled $8.5 billion, up 16% from the prior year. Loan amounts range from as little as $5,000 to over $100 million dollars.

To aid customers and partners affected by a COVID-19 cash flow crunch, DFS is adding more flexible repayment terms. These additional options are available through July 31, 2020, and can be tailored based on customers’ individual needs, and include.

  • 24 and 36-month financing at 0% interest for storage, servers, networking and data protection solutions.
  • As low as a 6-month term and rotation lease options for select laptops, thin clients and mobile workstations.
  • 3 and 6-month payment deferrals for qualified customers.

Perspective

COVID-19 has put many businesses, including Dell partners, in an extremely constricted cash flow situation. At the same time, this situation is challenging partners to do more things differently, such as learning how to sell virtually, and increasing their capabilities to perform service work remotely. In many cases, it’s likely that this new way to work will extend well beyond the pandemic.

Similarly, many end-user customers need to adapt their workplace to accommodate a virtual workforce now, and are likely to take a conservative approach to “returning to normal.” There likely won’t be a big rush back to the office, and some employees will continue to telecommute long after the virus subsides. On the technology front, most will need to add/enhance security, backup and recovery, connectivity and business continuity planning to support a virtual workforce—now and in the future.

Dell’s new programs help provide both partners and customers with more flexibility to adapt to current conditions and prepare for the evolving ways we will work in the future.

©SMB Group 2020

Source: Laurie McCabe’s Blog

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