For Dell, this time, patience proved to be a virtue. If you recall a few months ago Dell and HP were in fierce battle over unheard of 3Par. The only winners in that battle were the 3Par shareholders, who made off like bandits.
Dell executives were truly disappointed, but I said at the time they should look to acquire Compellent Technologies out of Minnesota. Compellent was 3Par's main competitor. Both 3Par and Compellent chased Pillar Data Systems in the market; Pillar is the outright leader in thin provisioning storage. The storage market overall is heating up and Dell realized early that its EqualLogic acquisition wasn't going to be enough.
I think this is a deal Dell had to make. It makes good sense because. First, it's way cheaper than 3Par. About $1.5 billion cheaper, and that's significant. Compellent may not be as enterprise-focused as Pillar or 3Par — it's main market is SMB — but really, how much of a stumbling block is that? Dell has a big enterprise focus and they'll have to roll up their sleeves and get to work to help Compellent break into the enterprise space.
This deal also works because Dell has changed its focus somewhat toward the SMB. The company is making a huge push into the SMB and Compellent is going to help it there. They should look at this as a blessing in disguise. One of Compellent's strengths is in fibre channel, which is something Dell did not get with its EqualLogic pick up.
At the end of the day, I think Dell got pretty much the same kind of technology, and for a lot less.
EqualLogic has done a lot of good for Dell. EqualLogic was a 100 per cent channel-friendly vendor and from some of my sources, they've been teaching Dell a thing or two about supporting the channel.
Right now, Dell's indirect business is at 13 per cent, which is really low considering they started three year's ago with Partner Direct. I have been told that their stated goal is to reach one-third of total business through the channel and I think that's a great target to strive for.
But the biggest positive news out of Dell is that they're not growing their direct sales force in Canada. In fact, they're hiring about eight to 12 channel field sales resources for 2011. This is another positive step in the right direction.
The challenge right now for Dell Canada is to help those channel partners capture the SMB sales they lost years ago to the direct sale. Sources tell me that Dell Canada is committed to passing those opportunities to the channel partners if there is a win, win, win situation. Also, those new field channel resources are going to get paid if the business goes through solution providers and Dell Canada will try to deliver at least 20 points of margin on these deals. Currently, Dell Canada has a few key partners in the SMB but they need more. I was also told Dell is planning a rebate-style program for the channel in 2011.
Dell has been pretty silent this year in terms of their channel plans. So all this news makes sense since they really can't over-promise given their history.
Two quick hits before I go. I just learned that Ron Hulse is leaving Samsung Canada after nearly five years. I think he did a great job establishing its printer division and launching notebooks into this market. CDN wishes him the very best.
And, Luc Villeneuve's farewell event is happening on Dec. 20th at Gabriel's Restaurant in Mississauga, Ont. Luc has taken a position at NCR Europe in Paris and CDN wishes Luc the very best as well.
