Michael Dell, chairman and CEO of Dell, on Monday committed his company to be a strong partner of the channel, but treaded lightly when asked about how the acquisition of EqualLogic might impact his company's relationship with EMC and with CDW.
Dell in early November said it plans to acquire EqualLogic in a deal worth $1.4 billion. For Round Rock, Texas-based Dell, EqualLogic is an opportunity to grab one of the top vendors in the red-hot iSCSI market while laying the groundwork for a channel based on EqualLogic's channel-only sales model.
Michael Dell told ChannelWeb that his company has grandfathered existing EqualLogic channel partners into Dell's Partner Direct program, and that his company has taken the best parts of EqualLogic's channel program and made them part of Partner Direct.
"Now these partners get everything they had before: deal registration, attractive margins, field channel support that's even increased," Dell said.
The acquisition has also been important to Dell's existing partner base as well, Dell said. "I think it's all good news for channel partners in terms of expanding the range of things for the 40,000 Dell channel partners," he said. "Of course, now we've added the Dell EqualLogic product line which gives them the most competitive iSCSI product line in the industry, which is right at the bull's eye of where storage is growing, and where it has very attractive margins."
When asked how Dell will assure channel partners that they do not have to worry about Dell sales reps taking away a registered deal, Michael Dell said that the channel-neutral compensation program has taken away any incentives for his reps to do that.
"Basically, our sales reps are compensated the same whether it's sold through a channel partner or its sold direct," he said. "So they have no incentive not to work with the channel, and in fact every incentive to work with the channel."
In fact, Michael Dell said, Dell's sales reps are already passing leads to channel partners.
"We're actually going to the channel partners with accounts that they don't actually have knowledge of or access to, and saying, 'Hey, here's 15 accounts in your area that know about Dell on the client side, and may be storage opportunities, and why don't you work these leads?'" he said. "So we're seeing lots of positive relationships being developed."
Michael Dell said that his company's relationship with EMC Corp., of Hopkinton, Mass., which EMC says accounts for over 30 percent of EMC's storage hardware sales, will continue through at least 2011.
However, he declined to discuss whether his company's EqualLogic sales will impact its sales of the EMC Clariion product line. "We have a broad portfolio of products," he said. "The EMC partnership continues through to 2011, and it's been very successful for both companies."
When asked about conversations between his company and John Edwardson, chairman and CEO of CDW Corp., the Vernon Hills, Ill.-based solution provider, a Dell competitor, and a top partner of EqualLogic, Michael Dell declined to discuss specifics.
"I've had conversations with John," he said. "I'm not really going to describe specific conversations with a specific customer or a specific partner. I don't really have anything to add there. You know, I call a lot of people. I call you. I call all kinds of people. Sure, I've been speaking with partners, with channel partners."
The conversation came just as Dell was getting set to unveil a new series of storage products based on the EqualLogic line it acquired when the acquisition closed last week. The Dell EqualLogic PS5000 Series includes three models, including the PS5000E with low-cost SATA hard drives, the PS5000X with 10,000-rpm SAS drives, and the PS5000XV with 15,000-rpm SAS drives.
Additional reporting by Steve Burke and Ed Moltzen