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» VIEW ALL POSTS Oct 24 2011   3:28PM GMT

EMC changes the channel on Dell sales



Posted by: Brein Matturro
Tags:
clariion
data domain
dell
emc
vnx

By Sonia R. Lelii, Senior News Writer

EMC president Pat Gelsinger said EMC had already moved on by the time Dell officially ended their storage partnership last week after a 10-year relationship.

Gelsinger said it was no secret that EMC’s partnership with Dell had to drastically change or end after Dell expanded its storage presence by acquiring EMC competitors EqualLogic and Compellent.

“It got to a natural point where the relationship had to be restructured or it had to come to an end. Unfortunately, it came to an end,” Gelsinger told a group of reporters last Thursday at EMC Forum 2011, held at Gillette Stadium in Foxborough, Mass.

Dell sold EMC’s Clariion, Celerra, Data Domain and VNX systems through OEM and reseller deals, with the bulk of the revenue generated from Clariion midrange SAN sales. Dell will also no longer manufacture EMC’s low-end Clariion.

Dell’s revenue sales for EMC’s channel have been sliding downward since last year, Gelsinger said. EMC reported Dell-generated revenue of $55 million in the fourth quarter of 2010, and that fell to under $40 million in the first quarter of this year. EMC has not given a figure for Dell revenue since then, but its executives said its non-Dell channel sales for the mid-tier increased 44% year-over-year in the third quarter of this year.

EMC has built up its channel this year, making the SMB VNXe product a channel-only offering that directly competes with Dell products. Earlier this month, EMC launched a channel-only Data Domain DD160 SMB system.

EMC has also continued to upgrade its VNX midrange platform. Last week it launched an all-flash model (VNX5500-F) as well as a high-bandwidth VNX5500 option with four extra 6 Gbps SAS ports, and support for 3 TB SAS drives throughout the VNX family.

“Now that we are no longer continuing forward [with Dell], we have to do it ourselves,” Gelsinger said. “It’s a clear, simple focus on our part.”

Dell began selling EMC storage in 2001, and in late 2008 the vendors said they were extending their OEM agreement through 2013. Dell also widened the deal in March 2010 by adding EMC Celerra NAS and Data Domain deduplication backup appliances to their OEM arrangement. However, the relationship had already started to deteriorate by then, going back to when Dell acquired  EqualLogic in early 2008.

The rift became irreparable last year when Dell followed an unsuccessful bid for 3PAR by completing an $820 million acquisition of Compellent in December.

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