Originally posted by Matt Brown on October 12, 2015 on crn.com
Dell’s $67 billion EMC acquisition wasn’t the only game changer from the company Monday as it revealed an expanded partnership with $12 billion solution provider powerhouse CDW — rival HP Inc.’s biggest partner.
The deal is a major breakthrough for Michael Dell, who for a number of years has expressed interest in expanding Dell’s relationship with CDW, but until now had been rebuffed.
Sales of HP products represented about 14 percent, or about $1.7 billion, of CDW’s sales last year, down from about 20 percent, or about $2.2 billion, the year before, according to CDW’s annual financial report.
Partners say they expect the new relationship to spark increased competition among hardware vendors as CDW effectively begins doing business with one of its biggest vendor partner’s chief competitors.
The “expanded partnership” between Round Rock, Texas-based Dell and CDW, No. 6 on CRN’s Solution Provider 500 , takes effect Tuesday. Dell hasn’t officially partnered with CDW in the past, but has a relationship with the Illinois-based company through businesses Dell has acquired, including SonicWall, Wyse and Quest.
The new CDW partnership includes all Dell products and solutions and covers North America, Europe and the Asia-Pacific region, Dell said in a release. CDW will help customers with Dell technology and Dell ProSupport services, and will be able to take customers from quoting through finance and delivery, Dell said.
[highlight type=”one”]Bob Venero, CEO of Holbrook, N.Y.-based solution provider Future Tech, No. 232 on the CRN 2015 Solution Provider 500, it is a “big win” for Dell to add a partner the size of CDW.[/highlight]
[highlight type=”one”]Venero said the timing of the deal, coming on the same day as Dell’s $67 billion acquisition of EMC, is telling. “Timing is everything,” he said. “Dell is extremely smart to get both these big deals done prior to Dell World next week .”[/highlight]
[highlight type=”one”]Venero said it was only a “matter of time” before CDW, already a major HP and Lenovo partner, became a bigger part of the Dell ecosystem.[/highlight]
[highlight type=”one”]A strong HP Inc. partner, Venero said he is used to competing with CDW. “We have competed with CDW in the past and we are going to continue to compete with CDW in the future — whether that is competition around HP or Dell or Lenovo, it is up to us as a value-added solution provider to provide our value to customers and not be concerned about CDW,” he said.[/highlight]
[highlight type=”one”]Venero said his HP Inc. business is growing at a significant pace, and he does not see Dell’s expanded CDW relationship changing that. “There are multiple areas where we need to grow and support our customers, and that is in a multi-OEM environment,” he said.[/highlight]
Stephanie Dismore, the vice president and general manager of US Channels for HP Inc.’s $55 billion printing and PC business, said HP’s partnership with CDW has never been stronger.
“We are winning together — quarter after quarter, we are taking share together with CDW,” she said, noting that CDW had informed HP of the expanded partnership. “We knew this was coming. We are outpacing the market with CDW. We are growing in every segment with them: fed, SLED, corporate, enterprise. The fact that Dell is now going to sell through CDW creates competition, but it is nothing we haven’t seen before. I believe in our products, people and programs. We are best in class. Iron sharpens iron, so bring it on.”
Dismore said solution providers’ selling products from multiple OEMs is a fact of life in the channel. “Competition is the way of the world,” she said.
Dismore stressed that as HP Inc. prepares to launch its new Partner First program as it officially spins off Nov. 1, it is doubling down on the channel.
“We are investing more in the channel than we ever have before,” she said. “We are going to continue to be the gold standard for the channel. We are a channel company through and through. We lead with the channel. We win or die with the channel.”
CDW reported about $12 billion in net sales last year, and said it generated about $1 billion in revenue for each of its several vendor partners, including HP as well as EMC, which is being acquired by Dell in a blockbuster deal also unveiled Monday.
One West Coast solution provider and Dell partner told CRN a tighter relationship between Dell and CDW will likely spark increased competition between vendors that work with CDW and “introduce a new level of competition within the Dell ecosystem.”
“Dell is one of the big horses in the market, and CDW has a very good machine,” the solution provider said. “They are very quick to register deals, and they have a very good back-end operation.”
Jim DeFoe, Dell vice president of Americas channels, said the pact with CDW satisfies CDW customers who have been asking for Dell products, and presents Dell with a solid new client acquisition opportunity “up and down the stack from SMB to the enterprise.”
DeFoe said Dell is expecting “strong double-digit growth” from the relationship annually.
Steven Burke contributed to this story.