Dell & EMC: No Parting of Ways

Among the many interesting tidbits contained in Tom Curlin's latest RBC Capital Markets research report was the observation that EMC and Dell may not be getting along.

"We believe Dell is having a very solid EqualLogic quarter at the expense of lower-end EMC sales," Curlin wrote this week. "Sources have seen the EMC/Dell relationship deteriorating in the field as Dell has increased its EqualLogic focus."

Of course, it's not the first time this partnership has been scrutinized. In February 2007, observers wondered about the fate of the Dell/EMC pairing when Kevin Rollins exited stage left. Then at the end of the year, there were questions about how Dell's EqualLogic buy would affect the EMC partnership.

So far, there's no sign that the two vendors will part ways, certainly not before their contract runs out in 2011. That said, though, Curlin is convinced there's no love lost over recent developments:

Dell sales reps appear to be selling less Clariion in favor of EqualLogic, particularly in lower-end Fibre Channel opportunities. As a reminder, Dell accounted for approximately 33% of Clariion in the most recent quarter. Looking to offset this dynamic, sources have seen EMC reps focusing on lower-end Clariion business that would have previously been fulfilled via Dell.At least one analyst cautions not to make too much of this reputed rift: "Dell has a new product, and sales people always like to sell what's new until the novelty wears off," says Greg Schulz of the StorageIO Group. Both vendors need each other's products and that won't change anytime soon, in his view.

Another source, Arun Taneja of the Taneja Group, thinks EMC may have to face some facts. "Dell's decision to buy EqualLogic signals that they were not happy with low-end iSCSI from EMC. That shouldn't be too surprising," he says. From Taneja's perspective, EMC, like the other big storage players, needs to create a strong, iSCSI product line -- one comparable to offerings from EqualLogic, Intransa, Pivot3, and Lefthand -- from the ground up. If EMC lacks the will to make its own, Taneja thinks the vendor should grab one of those upstarts.

If EMC did make a stronger move in iSCSI, that could unbalance the Dell arrangement. In the meantime, it looks like both vendors will forge on together -- though 2011 isn't that far off.

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