EMC and Dell's OEM marriage on the rocks

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EMC and Dell's OEM marriage on the rocks

Microscope contributor

EMC CEO Joe Tucci has confirmed its partnership with Dell is no longer strategic to the organisation as OEM sales of CLARiiON declined $55m (£34.6m) in Q4 while the reseller channel element soared.

The relationship between the pair has looked rocky ever since Dell branched out beyond its traditional roots with the acquisitions of EMC rivals EqualLogic and Compellent.

Only last week EMC confirmed Dell would not have access to the VNXe range, which will go down well with resellers being courted with a more partner friendly model.

In a conference call with analysts last night as EMC rolled out results for last quarter and 2010, head honcho Tucci revealed: "For sure, our relationship with Dell has moved from strategic to tactical."

In fact he went further: "For sure, its now mainly competitive."

The CLARiiON OEM deal struck in 2001 that was originally predicted to last just five years is finally floundering as Dell's sales sunk by $55m in Q4 in what was historically the largest period of the year for the partnership.

"So the Dell-driven revenues - which is their OEM business, the one they drive themselves - are actually getting quite small now. And I might add that our other channel, mid-market channels grew over 44% in Q4," added Tucci.

During their nine years together, EMC and Dell have amassed thousands of joint customers and discussions are under way between the two to find a common ground.

However, Tucci reiterated previous comments from his firm that it was "highly, highly unlikely, almost impossible that Dell will sell the VNXe" but there were considerations to allow it to punt VNX.

In the Q4 numbers released by the storage behemoth last night, sales went up 19% to $4.9bn (£3bn) as profits rose 61% to $628.6m (£396m). For the year, sales jumped 21% to $17bn and profits soared 75% to $1.9bn.


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