Dell Technologies Terminates Enterprise Computing Distribution Deal With Arrow: Sources

After a ‘thorough’ review process, Dell is ending its relationship with Arrow ECS, leaving some Dell partners to find a new distribution source and creating a $1.4 billion or more opportunity for other distributors.

Just one year after being honored as Dell Technologies’ North America Distributor of the Year, Arrow Enterprise Computing Solutions (ECS) has received notice that Dell is terminating its partnership with the distributor, sources and partners told CRN.

The end of the 10-year-old relationship comes after Dell undertook a formal review of its North America distribution business that included detailed requests for proposal (RFPs) from its North American distributors.

One of the key reasons for eliminating Arrow as a distributor was the fact that Arrow does not carry the full Dell line, specifically Dell client devices, and is only focused on the enterprise/midmarket rather than the full market opportunity that includes SMBs, sources told CRN.

Another factor, sources said, is Arrow ECS’ limited stocking positions and warehouse capabilities for Dell products.

The departure last September of Arrow ECS President and CEO Sean Kerins, who had a long-standing relationship with the Dell sales team, also could have been a factor, sources said.

Before joining Arrow, Kerins was a 10-year veteran of storage provider EMC, which was acquired by Dell for $67 billion, in 2016.

An Arrow source, who did not want to be identified, said the distributor is in the midst of investing in “gaps” in its capabilities related to hardware distribution.

“This hardware distribution thing is table stakes, and we need to improve,” the source said. “I know that there are a lot of operational types of discussions that have been trickling out and internal large projects that will help us modernize.”

Arrow ECS has been authorized to carry Dell’s entire enterprise business since early 2017. Prior to that, it was a primary distributor for EMC’s storage business.

Dell Channel Business Up For Grabs

High-level distribution sources told CRN that Dell’s new go-to-market model in North America puts $1.4 billion to $2 billion in business up for grabs by the other North America distributors.

Arrow’s top-producing dozen enterprise partners have until Jan. 31 to select a new distributor or buy direct from Dell, while the remaining 100-plus partners have until August 1, sources said.

“We’re making proposals and trying to lock down these partners based on our discussions with them on our service levels, technical enablement, credit lines and support,” said a distribution source. “It’s a $1.4 billion opportunity.”

Stephen Ayoub, president and co-founder of Ahead, No. 24 on the CRN 2026 Solution Provider 500, told CRN the company has received notices via phone from both Dell and Arrow about the change in their relationship.

Ayoub said that Arrow is a significant part of his company’s Dell business, but that the loss of Arrow as a Dell distributor should not be a major disruption for Ahead.

“As long as we continue to focus on delivering solutions to our clients, we’ve built pretty—I would say— ‘robust’ distribution and direct networking capabilities,” he said. “It’ll be a shift for us, but at the end of the day, we’ve built a business model that allows us to take advantage of either a direct or any distribution model. We’ve tried to ensure that we don’t have single reliability on any of our vendors, including Dell with Arrow.”

Arrow has been a phenomenal Ahead partner for well over a decade and helped the company scale its business, he said.

“They provided financing solutions, operation solutions and technical solutions over the years,” he said. “We will continue to be an Arrow partner with other product lines.”

Ayoub said he does not yet know if Ahead will sign with another distributor for its Dell business or do all its business directly with Dell.

“Certainly there’re pros and cons to each, but luckily we have the ability to do both, so it’s not going to have to be one or the other.”

Working with a distributor offers a variety of advantages, including streamlined operations, financial solutions, access to credit lines and the ability to utilize a distributor’s technical capabilities, Ayoub said.

Bob Venero, CEO of Future Tech Enterprise, a Fort Lauderdale, Fla.-based Dell Titanium partner, said the Arrow termination does not impact his company because he buys direct from Dell.

“Dell has very good operations, supply chain and delivery models for the bigger solution providers like us,” he said. “Dell is being smart in focusing on the distributors with the complete line card. This is a smart play by Dell. Arrow is a little bit more of boutique distributor, especially when it comes to stocking and having that inventory. This saves Dell some money and provides better efficiencies.”

‘A Thorough Process’

Anthony Tanoury, senior director of channel sales distribution at Dell, told CRN in May at Dell Technologies World that the company was close to making a decision on the RFP process with its four North America distributors: Arrow, D&H Distributing, TD Synnex and Ingram Micro. “Part of the RFP is what are you investing in us,” he said.

Tanoury said the RFP focused on nine criteria in “many different areas” and included meetings with each of the distributors. “We went through a thorough process,” he said.

“We want to make sure that we have our partners and our distributors focused where we need them,” he said.

Neither Arrow nor Dell directly responded to the question of whether their relationship is being terminated.

Dell said in statement emailed to CRN it regularly evaluates its go-to-market strategy and partner ecosystem to ensure” it is “best-positioned to serve our customers and drive growth” across North America.

John Hourigan, vice president of public affairs and corporate marketing, said in an email to CRN that the distributor’s strategy is “built on a broad, resilient portfolio and a clear focus on helping channel partners capture growth” in AI, cloud and hybrid infrastructure. “As a result, our portfolio continues to evolve to meet the ever-changing needs of our customers,” Hourigan said.

Arrow’s ECS Americas business for the Fiscal Year 2025, ended Dec. 31, was $4.23 billion, up 4 percent compared with $4.07 billion in Fiscal 2024.

Steven Burke contributed to this story.