'Bad Blood' From Storage Sales Divorce Hangs Over Dell-EMC Sales Teams

Among the many questions raised by Dell's $67 billion acquisition of EMC, one of the biggest has to be, what about that messy breakup over a reseller agreement that Dell and EMC had just four years ago?

Dell officially ended its reseller agreement with EMC in October 2011, two years before it was slated to end, and nine months after it paid $876 million to acquire storage vendor Compellent.

Dell and EMC inked the agreement in 2001, and for several years that deal worked out well for both sides. But cracks began forming in the Dell-EMC relationship in 2008 when Dell acquired storage vendor EqualLogic, and they grew larger when Dell got involved in a bidding war with HP for storage startup 3PAR, which it eventually lost.

[Related: Could Dell-EMC Deal Push Lenovo To Acquire IBM's Storage Business?]

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The battle between the EMC and Dell reps in the sales trenches is going to be one of the obstacles to the integration of the two companies, said EMC solution providers. They said EMC sales reps aren't thrilled about the idea of working for a rival storage vendor, and many could decide to leave in the meantime, several EMC partners told CRN.

"EMC reps hate Dell -- this message has been driven deep into partners and customers ever since Dell walked out on EMC and bought their own storage," said an EMC solution provider who did not want to be identified.

"How will those sales organizations come together as a cohesive selling unit? My guess is, they can't, and they won't. The fallout will be brain drain from the EMC side," said another EMC partner, who also didn't want to be named.

EMC sales reps used to bashing Dell's storage and server lines are going to have a "credibility" issue with customers as they move to embrace the Dell product set, said EMC solution providers.

One solution provider, who did not want to be identified, said he sees the "bad blood" between the two sales organizations is a "sad" fact of life going forward that could impact sales in the field.

"What people are missing in discussing the news are the sales guys," one solution provider who did not want to be identified told CRN. "Everything at EMC has been about how to beat Dell."

A Dell spokesman declined comment.

In an interview with CRN on Wednesday, Jeremy Burton, president of products and marketing at EMC, said he doesn't think EMC salespeople will leave after the deal closes because they stand to make even more money under the combined company.

The Dell-EMC reseller relationship was generating $2 billion in revenue in 2010, and Burton said it's possible the proposed union could generate even more.

"Sales reps like money, and we were making $2 billion [from the Dell-EMC reseller agreement] five years ago," Burton said. "If history repeats itself, there's potentially more than $2 billion up for grabs."

The Dell-EMC deal has triggered much uncertainty within the EMC sales ranks, EMC solution providers said.

One EMC solution provider, who did not want to be identified, said the vendor's midmarket and small and medium business sales teams "have no idea what will happen to them," and that the internal EMC messaging about the Dell deal wasn't handled well.

Dell CEO Michael Dell will lead the combined company, and David Goulden, CEO of EMC Information Infrastructure, will oversee its enterprise systems business. Beyond that, Dell and EMC haven't talked publicly about their executive leadership plans.

One way Dell-EMC could stem an exodus of sales talent would be to appoint Bill Scannell, EMC's president of global sales and customer operations, to lead sales for the combined company, said EMC partners. Dell and EMC could also offer financial incentives to convince key EMC sales reps to stay, they said.

But given the history between EMC and Dell, and the vast differences between their respective corporate cultures, even these moves might not be enough to stop a number of EMC sales reps from leaving, according to EMC solution providers.