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SADA Systems, a North Hollywood, Calif.-based solution provider, is a prime example of the type of partner Dell wants to embrace. Making its mark with cloud-based solutions, SADA Systems came in at No. 57 on this year's CRN Fast Growth list with two-year growth of 52 percent.
As a fast-growing solution provider, SADA Systems' president and CEO, Tony Safoian, has no time for hidden agendas or business partnerships that don't meet the requirements needed to serve CIOs. The VAR increasingly relies on vendor partners open to change, new ideas and even leveraging other manufacturers' technology if it is going to build tomorrow's infrastructure for customers today. Increasingly, but not surprisingly, one of those companies is Dell, Safoian said.
"The reality is any environment we go into is heterogeneous," Safoian said. "I'm not going into any server room and seeing only Dell boxes. That's just not going to happen."
But other vendors seemingly expect that to be the case for their products, he said. "As greater consolidation happens in the market, there are all these firewalls being created by certain vendors trying to be all things to all people. Dell has the right vision in that space."
Dell's commitment to an open architecture and open partnerships is evidenced by the fact that one of the requirements to obtain the company's Enterprise Architecture certification is a third-party certification from another vendor like VMware or EMC, said Dell executives.
Technologies such as virtualization and cloud computing, the progress of open-source software such as Linux and the growth of Google all point to companies operating in a more open environment, said Steve Felice, president of consumer and SMB for Dell.
"We want to set ourselves away from Cisco, HP and IBM, which we believe are going in the opposite direction," Felice said. "Open, capable and affordable: These are the messages we want to get out. Other companies take the complex needs you have and say, 'You need to trust us.' It becomes a black box and you're tied to it."
The open initiative is also driven by the tenet that 99 percent of commercial accounts aren't greenfields and companies aren't likely to rip out entire infrastructures, said Brad Anderson, senior vice president of Dell's Enterprise Product Group.
"You need to make [new solutions] work in existing environments," Anderson said. "Even with Dell having an offering in some things like networking, systems management, virtualization, even if we bring some unique IP, it's our philosophy that we're not precluding other vendors."
For example, Dell's PowerConnect networking portfolio supports Cisco, Juniper Networks and Brocade technology, too, Anderson said. "That's a big strategic difference with trying to vertically integrate a single vendor, that everything HP is 3Com, and Cisco is evil. The trouble with that strategy is 70 percent [of end users] are on Cisco. It's shortsighted not to support them. We do," Anderson said.
Dave Johnson, Dell's senior vice president of corporate strategy, has another take. "We are not focused on locking our customers in because we don't have a legacy we need to protect," he said. "We're much freer to leverage open architecture, to leverage all the innovations from a technology perspective and from a business process perspective to help customers achieve the most effective answer."
Still, some industry observers note that Dell's strategy is open by definition because it doesn't own the intellectual property in many segments, particularly storage and networking, that some of its competitors do.
"I think owning the entire hardware stack is more effective as it gives customers one throat to choke and allows for more seamless integration and management across the converged infrastructure," said Brian Alexander, managing director of equity research at Raymond James & Associates.
Dell has made a dozen acquisitions over the past three years and has publicly stated it's looking to fill more gaps. Still, company executives said the open-door policy would continue, no matter who buys whom. Ultimately, Dell's success in operating a more open-architecture sales strategy will be decided by customers, said Tiffani Bova, vice president of research at Gartner.
"I like when vendors put the power in [customers'] hands to determine how they want to run their organization when it comes to IT, so to me 'open' is good," Bova said. "When the customer is the guidepost to determine the best way to get products to market, then the result is an effective sales model."
Building a strategy based solely on what a vendor wants to do or is capable of doing will create a less-than-optimal experience for the customer, Bova added. "Dell has remained flexible with their channel program as they continue to invest in developing stronger ties with the indirect channel, expand their reach and push for more market share." Dell also has had the luxury of building a channel program from scratch, with no legacy complexities, systems or challenges to overcome, said Bova.
"While the program has focused on building a strong foundation, there is much work to do to get their indirect business to the next level. Acquisitions will test Dell's ability to integrate new products and services into the SMB space at scale while not encroaching on the very business and relationships they have been working so hard to establish," she said. "It is expected the program will continue to develop as Dell pushes their corporate agenda further into solutions and away from strictly product-oriented sales. However, that transition has proved a challenging road for many, so how Dell integrates their newly established channel against their stated near- and long-term objectives should further their desire to build a stronger and more leveraged sales model."
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