Dell Drops EMC – Ending 10 Year Relationship
Dell is dropping EMC, ending a 10-year alliance that has become increasingly rocky in the past few years.
Dell ended the relationship two years early. In a statement to Computerworld, Dell stated that it has “met the terms of the relationship agreement, and will service and maintain systems past 2013, through EMC’s end of life dates.”
The reseller relationship began in 2001. It had been twice renewed and was supposed to expire in 2013.
What a run, though. According to Computerworld, EMC earned 8% to 9% of its annual revenue from its relationship with Dell. For Dell, the partnership accounted for 50% of its storage revenue in years past — about 90% of it coming from the resale of EMC’s midrange Clarion line and 10% from the high-end systems.
Under the deal, Dell put its name on EMC hardware. Dell then resold the technology to its customers.
But the nature of the relationship changed as Dell began acquiring storage companies. In the past few years, Dell spent more than $2 billion on its own storage products. These investments were made as part of Dell’s efforts to be a player in the high-end data center business. Compellent was Dell’s most high-profile acquisition, putting it in direct competition with EMC’s Clarion line.
Services Angle
Dell had a coming out party last week as a new services business. It no longer only sells boxes. It seeks to align its solutions business with its hardware offerings. Ending its relationship with EMC is illustrative of that shift.
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