EMC officials said on Monday that the company has not abandoned its commitment to the channel in the wake of the reseller agreement announced that day with Dell.
For EMC, the reseller deal gives the vendor an opportunity to crack open small and midsize enterprise accounts that would normally be closed to the vendor even as it pared down its channel-oriented resources and the number of channel partner it works with directly, said Gregg Ambulos, vice president of EMC's global partnering.
"We are missing out on a lot of opportunities when customers buy a server with storage," Ambulos said. "With Dell, we can get in there."
Ambulos said that EMC will work to ensure that all its partners have a fair opportunity to compete. However, he refused to guarantee that EMC's channel partners would be able to purchase the company's Clariion products at a price lower than what Dell could offer to its direct customers.
"I'm not looking for partners that are going to be a fulfillment entity for me," he said. "They have to understand the EMC solution play, the value pitch, the value stack. We're trying to get our partners to move up the value stack. . . . We are going to make it a competitive playing field for all of our partners."
Ambulos said most of EMC's channel partners are focused on the enterprise Symmetrix space, and less focused on the entry-level and midrange Clariion space. As a result, EMC has over the past couple of months pulled its direct sales force out of what Ambulos called the "small and midsize enterprise" space.
"We feel that this is not only a great opportunity for Dell, but also for our existing partners to take advantage of us vacating that space from a direct sales side perspective. . . and focusing on opportunities there, and working with EMC's direct sales force on the enterprise space," he said. "We had to lower our cost of sales, we had to give our partners some space to play, and I think we've done that."
Even so, said Ambulos, EMC is cutting down the number of channel partners it works with directly.
EMC currently has about 200 to 300 indirect sales partners, including six or seven OEMs and three distributors, including Arrow and Avnet in North America and Bell Microproducts in Europe, said Ambulos.
The company cannot satisfy 300 relationships, especially in the lower tier where many partners are more order fulfillers, Ambulos said.
"Our pull here within the channel organization is to really narrow down our partners that are going to invest in EMC, that we're going to invest back into them," he said. "We're going to call them our tier-one partners. And we're going to get them to a point to where they're totally able to go out and address service offerings, whether its professional services or customers services, and move them up the value stack."
While EMC looks to focus its sales efforts on its top 25 partners, the tier-two partners are going to remain important to the company, Ambulos said. "We're not abandoning any thing," he said. "They're going to be able to take advantage of all the tool sets that we have. . . . But that's going to be more of a regionalized, a divisionalized, endeavor.
About 30 percent of EMC's business goes through the channel, said Ambulos. Of that, two-thirds go through the company's top-tier partners, with the other third going through the second-tier partners.
Despite the cutbacks in direct sales personnel, EMC is currently bringing in new people to address the new Dell business. However, said Ambulos, these people are coming in from outside the current organization, and will not impact the resources EMC has available to address its currently channel partner needs.
"We need our partners to be able to attain our objectives," he said. "I can tell you right now that, because of this relationship our other partners are not going to suffer."