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EMC to put hardware in servers, VMs in storage

October 25, 2011 06:00 AM ET

Earlier this week, Dell announced that it ended its 10-year reseller partnership with EMC, which at one time brought in as much as 50% of Dell's storage revenue while also being very lucrative for EMC.

Gelsinger said EMC management, and he personally, worked "extremely" hard to find a model to continue its reseller relationship with Dell, even though the revenue it gained through the partnership as of late was "de minimis." EMC in its second quarter this year saw only about $50 million in revenue from Dell resales, compared with EMC's $13 billion storage business. But he said the partnership couldn't have been better orchestrated.

"The relationship powered us both. Then it got to a natural point where the relationship had to be restructured or end. Unfortunately, it came to an end," he said.

In response to the impending breakup, EMC poured its resources into developing "thousands" of new, smaller reseller partners; this resulted in EMC gaining market share as Dell lost it.

In EMC's third quarter, sales from non-Dell reseller channels grew more than 40%, Gelsinger said. "If you look at the IDC data from Q2, Dell lost share; we gained share. I think that sort of says it all," he added.

While Dell sold EMC's Celerra (network-attached storage) controller and high-end Symmetrix VMAX arrays, the bulk of the partnership revolved around rebranded Clariion entry-level and midrange storage area network (SAN) arrays.

Earlier this year, EMC combined the Clariion and Celerra products to create its VNX array line, which serves up both block- and file-based data.

Geslinger said EMC will discontinue selling Clariion products as of January, but the company will continue support services for that brand for the next five years.

CEO Joe Tucci's departure

EMC CEO Joe Tucci has already publicly stated that he plans to step down by the end of 2012. At that time, he will name a successor.

At EMC's event last week, an EMC spokesman said Tucci plans to move from CEO to EMC board chairman, "at the pleasure of the board," for a two-year tenure, meaning he'll continue to help lead the company through 2014. At that time, he plans to again offer his services as chairman for an additional two years through 2016, the spokesman said.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at Twitter @lucasmearian or subscribe to Lucas's RSS feed Mearian RSS. His e-mail address is lmearian@computerworld.com.

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