Michael Dell Touts Benefits Of EMC Acquisition, Partners Watch For Channel Conflict vs. Benefits

Dell makes it clear that it is in the driver's seat when it comes to its planned acquisition of EMC as it prepares to use that acquisition to become a powerhouse in the enterprise data center and cloud business. Some Dell partners, however, said it will take time to clear out any channel conflict that potentially could be caused by the merger.

Michael Dell, chairman and CEO of the company that bears his name, used his opening keynote at this week's Dell World conference to discuss how EMC's enterprise leadership combined with Dell's unmatched strength in the SMB market will combine to make an $80-plus-billion IT powerhouse.

"We believe that a Dell-EMC combination offers unique value that is good for Dell, good for EMC, and very good for you," Dell told the audience of customers and channel partners.

[Related: What Will A Merged Dell-EMC Look Like?]

The combination will remain a private company to take advantage of the lack of Wall Street scrutiny to innovate, Dell said. "When we took Dell private, people asked if we will still make acquisitions," he said. "Well, go big or go home, baby. … EMC? $67 billion. Being master of your own destiny? Priceless."

The acquisition will let Dell bring together world-leading server, storage, virtualization and cloud technology, as well as the ability to invest in the future, Dell said.

"No one is more relevant or better able to bring it all together," he said. "[And] EMC is the best in the industry for incubating new technology, and we plan to continue that."

It's not going to be a quick marriage, said one solution provider who works with both vendors.

And there's no guarantee that it will be Dell management in charge when the process concludes, the solution provider told CRN on condition of anonymity.

"There are a lot of processes involved," the solution provider said. "Look at HP's move to split into two. HP is already two years ahead in the process. Dell is just starting. There's a lot of work the two need to do. It could be that EMC's management team takes over Dell. It's happened in other acquisitions."

Solution providers said they will be closely watching the acquisition for any channel conflict.

Channel conflict is a fact of life, and a part of doing business, said the solution provider who preferred to remain anonymous. However, said the solution provider, the conflict could become more intense as Dell and EMC come together.

"If I go in with a specific OEM, it's a knife fight every day," the solution provider said. "If I do HP compute with EMC storage, or Cisco compute with EMC storage, it's no problem. But all of a sudden, Dell has a seat at the table."

The solution provider said he doesn't expect issues to be cleaned up quickly. "It's only recently that EMC's VNX and Isilon reps learned to play nice with each other," the solution provider said. "There was four years of contention between VNX and Isilon reps."

Scott Winslow, president of Winslow Technology Group, a Boston-based solution provider and Dell channel partner, said he is under no illusions when it comes to the potential for conflict in the channel as Dell and EMC come together.

"Will there be channel conflict?" Winslow told CRN. "Yes. Dell just signed up CDW. Maybe it's to poke Hewlett-Packard in the eye, or maybe because CDW's a big EMC reseller. But CDW registers everything under the sun. We told our reps to make sure we register everything."

Paul Clifford, president of Davenport Group, a St. Paul, Minn.-based solution provider and Dell channel partner, said Dell and EMC bring to the merger two well-trained, savvy sales organizations.

"The leadership will have to be smart and get things organized," Clifford told CRN. "Will there be rogues on either side? Yes. It's a big deal. But they have to offer customers choice. If customers are happy with VNX, why move to Compellent? And vice versa? The only reason to change platform is if there is an issue. Otherwise, why change?"

The cultural fit will be an issue, said Michael Tanenhaus, principal at Mavenspire, an Annapolis, Md.-based solution provider and Dell channel partner.

One common tactic for motivating sales reps is to make clear to them who the enemy is, and Dell and EMC have made it clear in the past that they are each other's enemy, Tanenhaus told CRN.

"This gets everybody riled up," he said. "The customer bases are completely different. It will be difficult to change the enemy. This is the same in any big acquisition. What will happen depends on the details. So I'm cautiously optimistic. There are tons of opportunities here. But there are no answers in hand yet."

Even so, Dell channel partners who have not worked with EMC in the past are liking what they hear about Dell's plans to acquire EMC.

The acquisition will give Dell partners access to a wider range of customers than in the past, Winslow said.

"We thought about becoming an EMC partner in the past, but didn't want to do it because we want to play nice with Dell," he said. "Now we will get access to EMC. I talked to a couple of Fortune 5000 insurance customers last week. They want to do more with us. But they felt we didn't have the portfolio they need."

It will be important for Dell to manage the bringing together of the two companies, particularly when it comes to overlapping storage technologies, Winslow said.

"Dell will have to support both Compellent and VNX," he said. "The two have very large customer bases. They're too big to bring together."

Clifford said he expects Dell to segregate its different storage lines according to customer base.

"It will need some really smart management people to figure out what to do with all this," Clifford told CRN. "But from what I can see, Dell's already said its enterprise business will be managed in Hopkinton [Mass, EMC's headquarters]. EMC brings Dell into the enterprise. It's an invaluable opportunity for us."

The acquisition will position Dell as the world technology leader, said Patrick Mulvee, partner at Sidepath, an Irvine, Calif.-based Dell partner.

"That's exciting," Mulvee told CRN. "Our business, our value, is around engineering. We're excited about leveraging our existing relationships with customers, and building new ones. Many of our engineers in their past life implemented EMC technology, including people from past EMC partners like Stack and MTI, and from end users."

PUBLISHED OCT. 21, 2015