Dell ends EMC reseller partnership to focus on its own products

Dell has ended its reseller relationship with EMC for the firm's storage products and will now offer its own products direct to market, drawing to a close a 10-year partnership.

The firm has previously sold Dell-branded EMC systems and the firm's Clariion, Celerra, Data Domain and VNX products direct to businesses, as well as providing support and services to customers during their contracts.

The writing had been on the wall for the EMC partnership, though, after Dell chief executive Michael Dell said on an earnings call in August that the firm was looking to ditch the division that generated low revenue returns.

"We continue to eliminate lower margin business that's not strategic to the company long term," he said.

"Specific examples of this include exiting lower value reseller business in both storage and software, as well as unfavorable retail and reverse option deals in our client business."

Dell confirmed it would continue to support existing customers as normal during the life of their products, likely to last until 2016, but it will now only sell its own products to the market.

The firm is in a position to do so after a series of acquisitions including EqualLogic, PowerVault and Compellent, which Dell acquired for $820m in 2010 after losing out in a protracted bidding war with HP for 3Par.

Dell revealed that since completing the acquisition of Compellent it has grown the firm's customer base from businesses in 20 countries to 47 and increased staff from 500 to 820 as it continues to find traction in the market.

The firm has also announced the availability of a new product called the DX6000G Storage Compression Node that uses Ocarina compression technology to compress metadata files by up to 90 per cent.

Analyst Clive Longbottom from Quocirca told V3 the decision made strategic sense for Dell as it looks to broaden its offering to the market.

"Dell wants to move from being a server/desktop/laptop vendor to a 'solutions vendor' that can offer a full environment. Therefore, Dell no longer wants to be seen as an EMC reseller, and EMC doesn't want to be associated with an upstart competitor," he said.

"Dell is doing this the right way – it never really benefited to the extent it thought it would do with the EMC relationship."