EqualLogic CEO Fields Questions from Anxious Partners

EqualLogic CEO Don Bulens acknowledged Dec. 7 in a conference call "town meeting" with channel partners that some of them believe that, "EqualLogic is now damned and you've moved to hell with the devil."

That's his characterization of some partners' response to the company's pending acquisition by Dell, the PC maker that had differentiated itself in part by selling direct only for many years. Now Dell has eschewed its former direct-only "religion" and is looking to recruit new partners and retain the ones from newly acquired companies, including EqualLogic.

But partners continue to be skeptical as they wait for more concrete details of Dell's channel program of the future and how they will fit into it. And even after Dell's announcement of details on Dec. 5, many partners are taking a wait and see approach to whether the relationship will work at all. The devil may be in the execution.

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"We know that you view this combination in one of two ways," said Bulens. "You either are sitting back and saying we've enjoyed working with EqualLogic but are going to be cautiously optimistic and see how this is all going to play out. Or other channel partners have taken the more extreme point of view."

Partners on the call were anxious to learn details about how EqualLogic partners, their current benefits and their ongoing deals will be affected by the Dell acquisition which is expected to close at the end of Dell's fourth fiscal quarter, which ends Jan. 31, or at the beginning of its first fiscal quarter.

Bulens and Dell Channel Chief Greg Davis, who joined the call, admitted that there were many details they were unable to share until the deal did close. But in the interim, they said, they wanted to help assuage anxiety over the pending deal and what it would mean to partners. So they answered partner questions during the call. Not all the answers were reassuring.

Dell's direct sales force will begin selling EqualLogic products, according to Davis, but the products will carry the EqualLogic brand. Initial discussions around sales of the storage company's technologies centered on two separate brands—a Dell brand and an EqualLogic brand. That idea was ditched to avoid confusion in the marketplace. The EqualLogic brand will live on, even after the acquisition is complete.

But still unclear was the fate of deals in the pipeline that might be simultaneously being worked now by EqualLogic partners and Dell's direct sales force.

Partners also expressed concern over whether Dell would respect the deal registration of EqualLogic or of other vendor organizations that partners may register with, such as EMC. What was to stop Dell's sales force from competing with Dell partners on deals to sell EMC technology? Executives had no clear answer for this, and said that EMC's deal registration was a separate animal and not one that Dell's direct sales force was expected to honor.

For more on how Dell's EqualLogic acquisition will change the Dell/EMC dynamic, click here.

In response to questions from partners about how Dell would mitigate channel conflict, Davis said that the company was hinging on three different efforts: a dedicated organization within Dell to support channel partners, a deal registration program and the neutralization of compensation for Dell's direct sales force.

EqualLogic CEO Bulens also assured partners that EqualLogic's support organization in Nashua, N.H. would remain intact and support EqualLogic partners.

Bulens also acknowledged that Dell's minimum deal registration amount of $75,000 was higher than many of the deals EqualLogic partners register with EqualLogic.

"We will have to visit that issue specifically," he said. "For Dell's MSP program there is a difference in the deal registration policy. There is a lot of work that has to be done to bring these programs together in an effective way, preserving the things that have been important to the way you've operated with us in serving your customers."