Dell Technologies terminates enterprise computing distribution deal with Arrow: Sources

After a “thorough” review process, Dell is ending its relationship with Arrow ECS, leaving some Dell partners to find a new distribution source and creating a $1.4bn or more opportunity for other distributors

Just one year after being honoured as Dell Technologies’ North America Distributor of the Year, Arrow Enterprise Computing Solutions (ECS) has received notice that Dell is terminating its partnership with the distributor, sources and partners tell CRN.

The end of the ten-year relationship follows a formal review of Dell’s North America distribution business, which included detailed requests for proposal (RFPs) from its regional distributors.

One of the key reasons for removing Arrow as a distributor was that it does not carry the full Dell portfolio, specifically client devices, and is focused primarily on the enterprise and mid-market rather than the broader opportunity that includes SMBs, sources say.

Another factor, sources add, is Arrow ECS’ limited stocking positions and warehouse capabilities for Dell products.

The departure last September of Arrow ECS president and CEO Sean Kerins, who had a long-standing relationship with the Dell sales team, may also have played a role, sources suggested.

Before joining Arrow, Kerins spent ten years at storage provider EMC, which was acquired by Dell for $67bn in 2016.

An Arrow source, who asked not to be identified, says the distributor is investing in “gaps” in its hardware distribution capabilities.

“This hardware distribution piece is table stakes, and we need to improve.

“There have been a number of operational discussions and internal large-scale projects underway that will help us modernise.”

Arrow ECS has been authorised to carry Dell’s full enterprise portfolio since early 2017. Prior to that, it was a primary distributor for EMC’s storage business.

Dell channel business up for grabs

High-level distribution sources tell CRN that Dell’s revised go-to-market strategy in North America puts between $1.4bn and $2bn in business up for grabs among its remaining distributors.

Arrow’s top dozen enterprise partners have until 31 January to select a new distributor or move to a direct relationship with Dell, while the remaining 100-plus partners have until 1 August, sources say.

“We’re making proposals and trying to secure these partners based on our discussions around service levels, technical enablement, credit lines and support,” one distribution source says.

“It’s a $1.4bn opportunity.”

Stephen Ayoub, president and co-founder of Ahead, says the company had received notification via phone from both Dell and Arrow regarding the change.

Ayoub says Arrow is a significant part of Ahead’s Dell business, but the loss is unlikely to cause major disruption.

“As long as we continue to focus on delivering solutions to our clients, we’ve built what I’d describe as robust distribution and direct capabilities.

“It will be a shift, but ultimately we’ve built a model that allows us to operate via direct or distribution routes.

“We’ve tried to ensure we’re not overly reliant on any one vendor, including Dell with Arrow.”

Arrow has been a strong partner to Ahead for well over a decade and has helped the company scale, he adds.

“They’ve provided financing, operational and technical support over the years. We’ll continue to work with Arrow across other product lines.”

Ayoub says it remains unclear whether Ahead will move to another distributor for its Dell business or transact directly with Dell.

“There are pros and cons to each, but we have the flexibility to do both, so it won’t necessarily be one or the other.”

Working with a distributor brings several advantages, including streamlined operations, financial services, access to credit and additional technical support, Ayoub explains.

Bob Venero, CEO of Future Tech Enterprise, a US-based Dell Titanium partner, says the change will not affect his business as it already buys direct from Dell.

“Dell has very strong operations, supply chain and delivery models for larger solution providers like us.

“Dell is being smart in prioritising distributors with a complete line card. This is a logical move. Arrow is more of a boutique distributor, particularly when it comes to stocking and inventory.

“This should reduce costs for Dell and improve efficiency.”

‘A thorough process’

Anthony Tanoury, senior director of channel sales distribution at Dell, told CRN in May at Dell Technologies World that the company was nearing a decision following the RFP process involving its four North America distributors: Arrow, D&H Distributing, TD Synnex and Ingram Micro.

“Part of the RFP is understanding what each partner is investing in us.”

Tanoury said the RFP assessed nine criteria across multiple areas and included a series of meetings with each distributor.

“We went through a thorough process,” he said.

“We want to ensure our partners and distributors are aligned with where we need them to focus.”

Neither Arrow nor Dell directly confirmed whether the relationship had been terminated.

Dell said in a statement emailed to CRN that it regularly reviews its go-to-market strategy and partner ecosystem to ensure it is “best positioned to serve customers and drive growth” across North America.

John Hourigan, VP of public affairs and corporate marketing at Arrow, says the distributor’s strategy is “built on a broad, resilient portfolio and a clear focus on helping channel partners capture growth” in AI, cloud and hybrid infrastructure.

“As a result, our portfolio continues to evolve to meet changing customer needs.”

Arrow’s ECS Americas business recorded revenue of $4.2bn (£3.2bn) for the fiscal year ended 31 December 2025, up four per cent from $4.1bn the previous year.

Steven Burke contributed to this story.

This article originally appeared on CRN UK sister website CRN.