Off limits.
That's what EMC plans to tell its direct-sales force as it sets aside a market segment that will be handled exclusively by solution providers.
The storage vendor also intends to set specific sales management goals to provide incentives that ensure its aggressive direct-sales and services arms work with partners, says Gregg Ambulos, vice president of global partnering at EMC.
"The net of it is, to reach our stated [sales] objectives, we have to leverage our partners," Ambulos says. "Part of that discipline is being able to give them [solution providers] a piece of the business."
The changes come as many vendors, including Microsoft, Hewlett-Packard and Sun Microsystems, make changes to alleviate channel conflict and win solution provider support.
EMC, which has been piloting its new policy for the past several months, intends to detail the specific rules of engagement within the next 30 to 60 days, Ambulos says.
Kevin Reith, manager of strategic technology at InfoSystems, an $80 million solution provider in Wilmington, Del., says he welcomes the changes but is moderately skeptical.
"What we are really after is being in a position where we can capture some of the outsourced professional services," Reith says. "Embracing the channel from a product perspective is excellent, but that is only half of what we are after. . . . Everything sounds good on paper. The truth will be borne out over time."
At the same time it is embracing solution providers, EMC says it plans to increase its services workforce over the next year to 2,000 from 1,300 as it moves to drive services revenue to 20 percent of sales from the current 11 percent.
EMC Executive Vice President Frank Hauck, however, says the company is serious about making sure its sales and services representatives partner with the channel. "If there is any channel conflict or dysfunctional behavior, someone [at EMC] may not be here at the end of the day," Hauck says. "There is only one way of dealing with rules, and that is to enforce them. We are serious about the channel, and we are going to make it work."
The EMC changes are great news for solution providers, says Mike Cush, CTO of Adexis. The Columbus, Ohio-based storage solution provider division of Cranel started selling the EMC line this year and was apprehensive at first about working with the vendor, given the reputation of its direct-sales force, Cush says. So far, however, he has been impressed by the cooperation. "Everybody has to work at building up trust, and it takes time, but the building of our relationship is going well," he says.
EMC has made significant strides in winning solution provider support, according to CRN's Channel Partner Satisfaction Survey.
The EMC pilot program has already paid off for Logical Networks. The Bloomfield Hills, Mich.-based solution provider's year-to-date sales of EMC products and services already exceed those of all last year, the company says.
EMC executives said the increased reliance on the channel is critical as the vendor moves to significantly reduce its sales, general and administrative (SG&A) expenses from 30.5 percent to the low 20s percent.
"Part of the confidence we have that we can do that is we know we have stuff going on on the channel side," said EMC Executive Chairman Mike Ruettgers.
Additional reporting by Steven Burke.
