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So now this is just formalizing the strategy, saying, ‘Look, we can’t get at all the opportunity.’ If you look at EMC today vs. the EMC of 10 years ago, there is so much opportunity with our current portfolio that we don’t have all the reach [that we need to get to all of the potential customers]. So we are looking at our channel partners as an extension [of our direct sales force]. We are looking for channel partners to tell our story to their customers where they already have a relationship and with prospective customers. If they don’t have a relationship and we don’t have a relationship, then we will work together and figure out who does what.
CRN: It sounds like under the new Enterprise Select program you are moving to a 100 percent channel model. What percentage of channel sales was that one year ago?
Scannell: If you look at Enterprise Select, there is tier one, tier two, tier three and tier four. We have said, ‘Let’s do this thing over time, measure twice and cut once.’ So we are taking all the tier three and tier four accounts that we had and moving them to the channel. We are not going to reveal the revenue, but it is significant. That is where we are starting off first with those named accounts in the tier three and tier four category and all that business is going to go through partners. But there are many of those accounts who are not EMC accounts today or who are small EMC accounts today and we feel by working closely with the partners that we can significantly expand our market share in that space. Based on how well that goes, then we will go to tier two [accounts].
There will always be some accounts that EMC sells direct. If we are selling direct to an account and we are doing $150 million a year or $200 million a year in that account, we don’t necessarily need a partner. Now if a partner comes and registers an opportunity and they can add value and it makes sense for EMC and the partner and the customer, then common sense says we will work with the partner on that opportunity.
What we are now saying is that there is a whole subset of the enterprise where we are going to go indirect and we are going to let partners do the services because it worked really well in the commercial market. If you look at the high end of the commercial or midmarket vs. the low end of the enterprise market, they are the same size companies. So if it worked well in the commercial high-end market, it is going to work really well in the enterprise low market.