CRN Exclusive: Dell Revives EMC Sales Pact

In what may be the first indication of how Dell plans to position EMC storage products, the Round Rock, Texas, company next week will welcome EMC's VMAX storage solutions back to its price list.

Dell segment teams can begin selling VMAX on Feb. 1, and the company is in the process of evaluating pushing the EMC solution through the channel, said Jim DeFoe, Dell vice president of North America global commercial channels.

Also, EMC Chairman and CEO Joe Tucci told investors during a conference call this week that the company's bread-and-butter VMAX line is the focus of significant ongoing development efforts.

[Related: 'Bad Blood' From Storage Sales Divorce Hangs Over Dell-EMC Sales Teams]

Tucci said EMC is re-architecting VMAX, as well as its VNX hybrid flash storage systems, to use next-generation flash technology "optimally." Tucci characterized the changes as "major enhancements" to the systems intended to make them competitive in the all-flash market.

This has several implications for Dell, especially in light of the companies' failed reseller agreement, which began in 2001 and lasted about 10 years. That agreement ended in acrimony two years early, after Dell acquired storage vendors EqualLogic and Compellent, and got involved in -- and ultimately lost -- a bidding war with Hewlett-Packard over storage startup 3PAR. The reseller agreement generated about $2 billion in annual revenue in 2010, according to EMC executives.

A top executive at one large solution provider said the deal provides a glimpse into Dell's strategy as the merger draws closer, but also has the potential to pit Dell direct salespeople against channel partners.

"[Dell and EMC] are competitors today, even though they're planning a merger. It's not closed yet," said the solution provider executive, who wished to remain anonymous. "It speaks to how they might come together, and it says they're moving closer and closer together. It makes the deal more real."

"If it goes through the channel, I don't have many concerns," the solution provider said. "If it doesn't go through the channel, it has the potential to create a competitive dynamic between the channel and Dell's direct teams," he said.

The Dell-EMC company line is that the two companies' product lines are intended for different customers, and the solution provider said that's the case with VMAX and Dell's main storage products.

"VMAX is in an area that is not covered by Compellent or EqualLogic. It's a higher-end solution," he said. "In the old days, we would have these competitive battles about selling VMAX as opposed to Dell teams selling Compellent because it was all they had."

Stephen Monteros, vice president of business development and strategy at Ontario, Calif.-based solution provider Sigmanet, said VMAX could be a welcome addition to the Dell portfolio. ’It was there before, and Dell told me [it] sold a lot of it. It could be interesting, very interesting with EMC and Compellent both on the menu."

David Goulden, CEO of EMC's Information Infrastructure business, didn't address the new agreement specifically during a conference call with investors this week, but did reiterate the companies' position that very little overlap exists between Dell and EMC.

"There's not a lot of overlap, and where there is some, we're going to make sure all our customers are looked after and everybody has a road map," Goulden said. "We're being very careful that customers buying products now have a clear go-foward path into the future based on those investments."