EMC Q1: Channel Now Over 50 Percent Of Sales, But No Impact On Margins


The channel is turning out to be a major force at EMC as over 50 percent of the company's storage revenue now comes through indirect sales.

Comments on the growing impact of the channel sales by EMC's top two executives came as EMC on Wednesday reported good revenue and earnings growth for the first fiscal quarter of 2013, which ended March 31.

David Goulden, EMC president and COO, said during his prepared remarks on the company's first-quarter 2013 financial conference call that over 50 percent of his company's storage revenue now goes through the channel, and channel sales are growing faster than overall sales.

 

[Related: Q&A: Bill Scannell And EMC Make The Channel Push]

"Our channel program continues to improve quarter after quarter, and Q1 was no exception," Goulden said. "Over 50 percent of our revenue goes through the channel, and this revenue continues to grow at a faster rate than our revenue overall."

EMC solution providers said they have benefited from EMC's growing channel business.

EMC has become a very significant partner for FusionStorm, which has built its managed services business on EMC’s technology, said Dan Serpico, president of the San Francisco-based solution provider.

"EMC is a terrific company, and very well managed," Serpico said. "I see it as one of our most important partners, and I've seen them change positively over time."

Dave Butler, president Enterprise Computing Solutions, a Mission Viejo, Calif.-based solution provider and EMC partner, said EMC is right on in its messaging about the channel.

"I'm very glad that EMC is on that message, that channel sales are growing at a greater pace than its overall business. That's a good message for the industry."

Goulden said that just fewer than 2,200 VSPEX reference architecture-based solutions have been sold in the 12 months since VSPEX was introduced. That represents a faster start for a reference architecture business than what was experienced by any of EMC's competitors, he said in likely reference to NetApp's FlexPod.

He also said that nearly 50 percent of Vblock demand in the first quarter came from new customers. Vblock converged infrastructure solutions are built by VCE, a joint EMC-Cisco venture.

Both VSPEX and VCE Vblocks are channel-exclusive solutions.

NEXT: Tucci Says 'Growing And Vibrant Channel' Important