EMC sees multiple pluses for Canada market in Dell deal

EMC Canada channel chief Michael Kerr gives a specifically Canadian take on the pending merger with Dell, as well as initial partner reaction to some of the new product announcements from EMC World.

Michael Kerr

Michael Kerr, Director, Partner Sales Canada, EMC

LAS VEGAS – The imminent merger of Dell and EMC is good news for EMC in the Canadian market specifically on a number of fronts – which are different in some cases from the general synergies that the two companies cite as central to the deal. That’s the view of Michael Kerr, Director, Partner Sales Canada.

Kerr said that partnering with Dell in the last decade was particularly lucrative for EMC in Canada, and that they expect a similar strong performance now from being part of the same company.

“Dell was our largest partner when we had that partnership,” Kerr said. “They did a third of our business, and they generated more new logos than the rest of our partners combined. Dell is very heavily geared to the dynamics of the Canadian economy.”

Kerr said that the number of EMC partners who also sell Dell is higher in Canada than it is in the U.S. He estimated that it’s between 45 and 50 per cent now, even before the two companies are formally united.

“Scalar and Softchoice are also big Dell partners,” he said. Softchoice has been Dell’s Canadian partner of the year for the last two years.

“The experience of our partners that are already Dell partners has been extremely positive,” he said. “Now, the partners are looking forward to the combined power that both vendors bring. They are trying to solidify their go-to-market, and reduce their costs. Skills certification is a major element of those costs. All the vendors want this now and the certifications take time. The cost for a partner of getting a fully certified individual can be well over $200,000. It’s not the cost of the materials itself. We don’t charge for that. It’s the time spent away from billable activity. Consolidating two vendor partners saves them money because they can spend more time billing. There was a time when a lot of partners carried six or seven storage vendors That’s crazy. They can’t do that any more.”

EMC’s global channel chief, Gregg Ambulos, said that in the U.S., they are already seeing cases where partners are putting together joint EMC-Dell solutions, basically brokering the deal and bringing both EMC and Dell sales in. Kerr indicated that they aren’t seeing that happen yet in Canada.

“We see the promise of that but have yet to see it really happen,” he said. “In the U.S., there are a lot more VARs, which means that they need to find more differentiation, so it would make sense that they would be in front on this.”

Kerr also thinks EMC will benefit from the fact that Dell is a private company, for reasons that go beyond the ability to plan long-term without the need to make quarterly numbers that Michael Dell has endorsed glowingly many times.

“It’s my personal view that we may see a change in our sales culture to profit, compared to top line,” he said. “I suspect that Dell as a private company is more into profit. That’s my guess. But that would be more like the way VARs think, which would produce more synergy. Our sales reps will sometimes try and get VARs to cut, say, five points off a ten point deal to secure the deal. But if they do that, it takes 50 per cent of their profit, and the channel folks consistently remind our people of that. If the VAR doesn’t make enough money off a deal, they won’t call us next time.”

Kerr indicated that no discussions with Dell in Canada had taken place about how channel strategy here would work after the merger. He indicated that he didn’t even know Tara Fine, his opposite number at Dell Canada – which is less surprising when one remembers that Kerr is based in Calgary while Fine is in Toronto.

“We haven’t had any contract with Dell over channels, and we have specifically been asked not to,” he said. “I don’t have a lot of information on Dell’s channel programs, although the feedback from our VARs has been positive.”

Commenting on the newly announced products at EMC World, Kerr said that the newly announced Unity mid-market offering is particularly well positioned for the Canadian market.

“The sales of VNX in Canada are almost the opposite of the U.S. from a percentage point of view,” he said. “We have a higher ration of VNX to VMAX. We are mainly a VNX environment, and have installed a huge number. Unity is a fantastic opportunity for the to renew that base, and gives the sales rep a very simple and a very strong reason to make a sales call.”

Kerr said Unity in Canada will be almost entirely a channel product.

“With VNX, 80 per cent of the time in Canada, it’s a VAR that sells it,” he said. “We don’t want our direct people to make those calls. It’s the kind of call that’s ideal for a VAR to make. We will have a major push in Q2 to revisit our install base with our partners, to reintroduce the value of not only us, but the partners as well.”

Kerr said he had also heard interest from some partners in the newly announced Data Domain Cloud Tier, either through Virtustream or hosting it themselves.

Finally, Kerr indicated that while partners are bullish on the Dell merger, they indicated that the nature of big mergers naturally creates some concern among their customers.

“Partners see more concern in the client field,” he said. “They worry about a large merger, and whether it will distract people. We think that we can address this by finishing out this year as a normal entity. Our fiscal year ends at the end of December, and we are very focused on closing the year as EMC.”

On a (semi) lighter point of view, Kerr said they are really looking to moving to the Dell year end, which comes at the end of January.

“We are really looking forward to Christmas 2017, because it will no longer coincide with our year end. We might have some time with our families.”