Partners given Compellent case for Dell merger

Storage vendor promises VARs protection on renewals and existing deals

Storage vendor Compellent has assured partners that its merger with hardware giant Dell will help them trap more business, although doubts remain in some quarters.

The two vendors released a statement yesterday confirming that they have entered into a definitive merger agreement, with Dell set to acquire Compellent for $960m.

The deal is expected to close in early 2011 and has been approved by the vendors' boards of directors.

The statement also announced that Dell has signed a reseller agreement with Compellent and will begin marketing the vendor's products to its worldwide customer base immediately.

To coincide with the announcement, Compellent's chief executive Phil Soran has written to his partners to explain the rationale behind the deal.

He stated: "We both have a strong entrepreneurial spirit, a heritage of innovation and a commitment to our customers.

"Dell has an incredible global distribution network and their reach will help us scale beyond."

When the deal was first mooted last week, partners voiced concerns over Dell's reputation for taking deals direct.

Soran's letter sought to assure partners that their existing deals and renewals will be protected. It read: "In the short term, Dell becomes another channel partner on a level playing field with our other resellers.

"All of your existing deals are protected [and] you still hold the Compellent upgrade business. The repetitive revenue opportunities in existing accounts remain yours."

He also promises that, once the deal closes, partners will receive more investment in the Compellent channel, including sales programmes and resources.

Meanwhile, the senior vice president of Dell's enterprise storage group, Brad Anderson, has hit out at suggestions that joining forces with Compellent will sour its relations with storage behemoth EMC.

Back in October, EMC chief executive Joe Tucci confessed that its reseller agreement with Dell had "cooled off" after its failed attempts to buy rival vendor 3Par.

During a conference call yesterday, discussing the acquisition, Anderson played down the impact the deal will have on its relationship with EMC.

He said: "We've had a ten-year partnership with EMC. Dell and EMC have close to 24,000 joint customers and we have been talking with EMC and we're both committed to doing the right thing for those customers.

"We're going to continue to support those customers as they want to be supported," he concluded.

Despite this, Paul Sweeney, managing director of VAR ANS Group, described the deal as "another nail in the coffin for the EMC relationship".

He added: "It is great for us, as a NetApp Star Partner, as this will cause confusion in the partner channel. In the marketplace, Dell is not a partner-friendly organisation and I would be very sceptical, if I were a partner."