EMC Shares the Wealth
Sometimes, it pays handsomely to partner. Just ask EMCs sales force. Under a new incentive program, EMC soon will give its salespeople financial perks when they ink customer contracts that include third-party systems integrators. The storage giant unveiled the program during a recent internal sales meeting, according to sources within EMC.
The move opens the door for solutions providers to more easily target the storage market. Thats good news because storage sales are expected to grow faster than overall IT spending this year.
Despite earnings warnings from dozens of high-tech companies, EMC hopes to avoid the IT spending slowdown. Executive chairman and CEO Mike Ruettgers recently reiterated that EMC will meet its projected revenue goal of $12 billion for fiscal year 2000. Actual results will be announced on Jan. 23.
Ruettgers knows EMC will need partners to maintain its growth, because the company doesnt have enough integration experts of its own. "Im not aware of any company outside the technology belt today that has the ability to do integration," says Ruettgers.
Still, EMC isnt abandoning its direct sales and consulting organizations, which are considered the biggest in the storage business. "Were strengthening both sides," says Tom Heiser, EMCs VP of global channels and service providers.
Heiser declines to confirm or deny EMCs new partner-centric sales incentives. But he notes that EMC already works with Accenture (formerly Andersen Consulting), CTS, EDS, Razorfish, Sapient and Stack Computer, among others. In fact, EMC started working with integrators about five years ago, according to Heiser.
Last April, EMC augmented the overall effort with the Proven Program, which is designed to give integrators training and certification in EMC products.
Going forward, EMC is particularly interested in teaming with regional integration powers, vertical-market specialists and consulting firms that target customer relationship management, says Heiser.
EMCs partner push looks promising, but the company still trails IBM on the indirect sales front. Partners generate roughly 45 percent of IBMs storage revenue. At EMC, that figure, according to Heiser, is approaching 40 percent and has been rising annually.
In addition to servicing customers, partners often lead storage vendors to customers, rather than the other way around. CTS, for example, has generated strong storage sales for EMC, Hewlett-Packard, IBM and Sun Microsystems. Similarly, systems integrator Champion recently delivered a major customerDalet Digital Media Systemsto IBMs storage table. Champion is IBMs top integration partner in the storage market. Storage solutions generate roughly 60 percent of Champions $110 million in annual revenue.
Still, storage isnt easy money. "[It] isnt for the faint of heart," says Champion CEO Chris Pyle. "You have to invest a lot of money in hiring people who can implement a storage solution, and who can do the kind of whiteboard presentation that makes an implementation understandable to clients."
Meanwhile, storage vendors are pushing beyond integrators on the partner front. Other critical allies include service providers, software developers and OEMs. EMC, for instance, has a dedicated sales force that directs business to xSPs, like storage service providers, ASPs and ISPs. A new compensation program, similar to the systems integrator program, is already up and running for the xSPs, says Heiser.
EMC also has been teaming with those "infostructure" partners for about five years. Allies in that area include Broadwing, Comdisco, Exodus Communications, Loudcloud, NaviSite and PSINet, to name a few.
With competitors close by, EMC will depend heavily on its partners to drive 2001 revenue growth.