The Four Faces of EMCBy Michael Vizard | Print
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EMC wants its four business units together to contribute $23.5 billion in revenue, with the channel accounting for 50 to 60 percent of that.
EMC wants to engage channel partners with four distinct parts of the business. The first is the parent company, which makes most of its money selling storage systems. The other three are VMware, RSA and the new Pivotal business unit that's focused on application development.
While committed to working collaboratively, each of the EMC business units is free to partner with whomever it chooses. Collectively, EMC is looking for all four business units together to contribute $23.5 billion in revenue, with the channel accounting for roughly 50 to 60 percent of that.
EMC also aims to reward its partners more for selling solutions that include components from its various business units. To help foster that effort, the company announced at the EMC World 2013 conference, May 6 to 9, that it is preparing to retire a Velocity channel program that company executives say is too focused on resellers in favor of a new program that will be rolled out in early 2014 and will better address the larger channel community of resellers, integrators and developers.
"We want to remove factions and silos in the program," said Jeremy Burton, EMC executive vice president for product operations and marketing. "We want to be able to drive customer transformation."
The primary areas of focus for each of the major EMC business units are as follows:
EMC: Sell virtual storage across a best-of-breed portfolio to take advantage of emerging big data opportunities.
VMware: Lay the foundation for virtual data centers.
RSA: Drive the adoption of security intelligence applications that identify threats before they affect IT.
Pivotal: Create the platform on which next-generation cloud computing applications will be developed.
As part of an effort to make it easier for channel partners to navigate all these offerings, EMC also promised to revamp its partner portal and add support for Apple iPad devices.
EMC also moved to make it easier for both partners and customers to do business with the company by allowing customers to treat its backup and archiving products as elements within a larger EMC Data Protection Suite that can be swapped out as customers' needs evolve.
According to Chris McLaughlin, vice president, IIG channel sales and alliances at EMC, one of the primary reasons the company needs a new approach to the channel is that customers are increasingly demanding turnkey products and cloud services that require a new approach to selling. He said that instead of looking to IT services companies in the channel to configure a system or install the base level of an application, customers are requiring vendors and partners to deliver services that are higher up the value stack.
"Customers want us to understand their business processes and then deliver templates that optimize those processes," said McLaughlin. "They want us to move higher up the value stack."
Partners who are already moving in this direction are enjoying significant success and "want to capture incremental value in IP [intellectual property]," he added.
EMC said that partners that participate in the EMC Certified Solution Program recorded a 300 percent increase in net license revenue year-over-year, and strong growth in 2013, with a 325 percent increase in revenue year-over-year in the first quarter.
In addition, McLaughlin notes that EMC is already seeing more partners reselling IP development by other partners on top of EMC platforms, such as the Documentum document management system. That activity, however, may also be spurring significant merger and acquisition activity across the EMC channel, as partners look to invest more in unique intellectual property to add differentiated value.
Whatever forms that IP takes, McLaughlin said customers are insisting on having the flexibility to consume it any way they want—whether on-premise or in the cloud. Therefore, solution providers need to be able to move seamlessly between delivery models.
The issue, of course, is that there is no shortage of competitors pursuing the same opportunities as EMC.
"We're definitely playing for big stakes," said Burton. "And, make no mistake; there will be big winners and big losers."
Michael Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.