EMC strengthens channel relationships

By Sonia R. Lelii

EMC's introduction of the "EMC Select Program" last week signaled a subtle but significant change in its relationship with resellers and other partners--a move that analysts say reflects CEO Joseph Tucci's vision of moving the company away from its direct sales, hardware-centric business model toward a more partner-centric approach.

As part of the new program, EMC now will resell third-party manufacturers' products under the original brand name, enabling customers to buy storage networking components directly from EMC. The first products available through the Select program include tape libraries from ADIC (Scalar family), Fibre Channel host bus adapters (HBAs) from Emulex and QLogic, and connectivity devices from CNT (FC/9000 FICON Director, UltraNet Edge 3000 Storage Router, and UltraNet Storage Director-eXtended, or USD-X). The products will be available through EMC's direct sales force and partners.

EMC Select partners will directly deliver service and support for their specific products, while EMC's Customer Service organization will continue to provide problem diagnosis for entire infrastructures and will work in conjunction with its partners through customer support agreements (CSAs).

According to analysts, the Select program represents a shift for a company that once strongly guarded its control over product branding. For instance, several years ago Hewlett-Packard and EMC cut their ties when HP wanted to resell EMC's Symmetrix arrays under the HP brand name (which led to HP's reseller deal with Hitachi Data Systems).

"[The Select program] is a step that moves EMC farther from its direct-sell hardware roots, continuing its march to a beat...from several different drummers at once: software, hardware, services, resellers-and now, product partners," according to a report on the Select program written by David Freund, an analyst with the Illuminata research and consulting firm (www.illumnata.com).

"EMC is taking a huge step beyond its formerly one-sided view of reseller relationships toward a future that is far more partner-centric," says Freund.

Freund adds that the new program, which also allows partners to go on joint sales calls, will give EMC's partners more visibility, and the relationship between EMC and partners is less one-sided.

In the last several years, EMC has made significant moves to erase its past reputation as a hard-charging direct sales company to one that wants to bring more resellers into the fold. For example, Freund notes, earlier this year EMC set up a "named account" list of 1,800 enterprise customers and 3,000 commercial customers to whom EMC will continue to sell directly, but it also identified 51,000 accounts that EMC promised to leave to its reseller partners. In addition, EMC's acquisitions of Documentum and Legato significantly increased its presence in the reseller community. And last year, EMC invested about $20 million in its channel business.

"EMC is becoming more of a solutions organization," says Doug Burke, CNT's global business director for EMC accounts. "They want the ability to talk to customers about every facet of their applications and infrastructure."

EMC officials say more products will be introduced in the future in its Select program. All of the products have been tested and qualified by EMC's vaunted E-Lab Tested interoperability program and are offered with EMC-approved configurations.

This article was originally published on August 23, 2004