CDW CEO Raises Red Flag On Dell/EqualLogic Relationship

The Vernon Hills, Ill.-based CDW accounts for a robust 25 percent of EqualLogic's revenue, Edwardson told Wall Street analysts at the Raymond James IT Supply Chain Conference in New York Wednesday. But he noted that Dell's blockbuster $1.4 billion acquisition of Nashua, N.H.-based EqualLogic last month could change the game.

"We have a lot of EqualLogic business in the pipeline that we will continue to fill, but at the same time, we don't necessarily want to deliver that warranty information to Dell because we don't know if they will use it to compete on other products that we sell." Edwardson said.

CDW has a famously adversarial relationship with Round Rock, Texas-based Dell. On his first day with CDW some six years ago, Edwardson took a sledge hammer to a Dell PC in front of hundreds of employees to symbolize how CDW planned to crush Dell in the marketplace. The two companies have aggressively competed for business customers ever since.

Now with Dell's purchase of EqualLogic and the development of a formal Dell channel program for VARs, the once unheard of notion of a relationship between the two companies all of a sudden could materialize.

Edwardson, however, isn't about to cozy up to Dell just yet. "We're a good listener is the best way to describe it at this point," he said. "We helped create a lot of value for EqualLogic shareholders. It is a very good product. It sounds like their plans are for an EqualLogic brand and a Dell brand. It will be a little confusing for channel participants to say they [Dell] are friend or foe. It will take time for Dell and the channel to figure this out. At this point we are listening."

In a conference call with partners last week, EqualLogic CEO Don Bulens said that there will not be separately branded Dell and EqualLogic products. "There was some discussion of separately branded products, and that would just introduce confusion into the market," Bulens said. "So it will be the same products with the exact same functionality for everyone."

CDW, meanwhile, has yet to determine if it will look to sell other Dell products, Edwardson said. "We have had such great relationships over the years with HP, IBM/Lenovo, EMC," he said. "They have been very supportive to CDW. I think it would take a lot to make any changes that are key to our important vendors."