Softchoice CEO Dishes on Dell/EqualLogic, Green Strategy

Solution provider SoftChoice made its name as one of the top Microsoft partners in North America, but its complete solutions portfolio, available through 45 branch offices in the United States and Canada, is what really will help the company achieve $1.2 billion in sales this year.

David MacDonald, CEO of the Toronto-based VAR, recently spoke with Scott Campbell, assistant news editor of Everything Channel, about its growth, its new environmental strategy and the difficult choice the company made this year whether or not to support EqualLogic after the storage-based vendor was acquired by Dell. Edited excerpts of the conversation follow.

EqualLogic lost at least one major customer in CDW after it was sold. Where does Softchoice stand in regards to working with EqualLogic? I notice there are still three pages of EqualLogic products available on your Web site.

One of the things we value is that we bring emerging technologies to the marketplace. We enjoyed a lot of growth with EqualLogic. It fit well with our model to bring iSCSI solutions to customers. The [Dell] acquisition did give us reason to pause. What we are doing today is we are continuing to sell [EqualLogic] based on customers that have already bought it from us. We are really growing our iSCSI technology with other partners, such as IBM, Hewlett-Packard and LeftHand Networks. We will continue to source solutions through companies that have been our partners for a long time.

Did you have conversations with Dell following the merger?

We did. [Dell Chairman and CEO] Michael Dell came and visited us. He took us through their EqualLogic acquisition. I will say they were quite interested in growing the relationship with us. We did consider it. We had a team go down to Austin to look at their channel strategy. At this point, we have elected to go with the partners we've had for years and we continue to look for other emerging vendors.

So you will only sell EqualLogic now to legacy customers. Was there one reason in particular why you chose to downgrade that vendor relationship? Did you have concerns about Dell's direct legacy?

We gave it a good review, but in the end we have elected to continue to build through our existing partners. We took a look through the strengths we had. We have a great supply chain. We have 45 branches calling on customers. We wanted to continue to grow our business. We thought better synergies were with people like HP, IBM, LeftHand.

What did your existing EqualLogic customers say? Did they have their own concerns about the Dell-EqualLogic merger?

We continue to serve the need for our EqualLogic customers. For those customers, not a thing has changed. We have a lot of customers that do business with Dell, some that have chosen not to. The merger did not create alarm for customers. They're a great company, Dell, but there are some customers that continue to do business with other [vendors]. In general, customers are viewing it as a balanced view.

In the months since the merger, Dell has taken more steps to ramp up its PartnerDirect channel program to solution providers. Did you consider selling a broader array of their products?

We definitely did look at their full product portfolio. We felt at this point with their channel model that they will need to make significant change in their corporate culture, and it will take time to wrap its head around the channel. We feel at this point [it's better] to go with partners we had. It will take a while for their own [channel] to mature within their corporate [structure] and that has its own set of issues that we prefer not to spend our time on.

So looking at Dell/EqualLogic as a whole, is your stance on selling their products a "no" or a "not yet?"

Not ... yet. We think that EqualLogic has great technology, but in the past year, there has been a proliferation of iSCSI technology. I said not yet and that means the next 24 to 36 months. The reality is, we always have to think of customers first. If their channel maturity came to fruition and if they make some of the deep-rooted changes they need to make and that benefits traditional channel partners, we would look at that. The cultural changes necessary are not easy.

What sorts of new solutions are you now offering to customers through your existing partners?

One of the big things we're seeing are the environmental effects of technology. We recently implemented an environmental assessment capability, with the EPEAT (Electonic Product Enviornmental Assessment Tool) rating system, that helps take advantage of technology by having less of a carbon footprint. We see that as a big requirement. We also see asset management, and of course, virtualization, consolidation, particularly with VMWare and blade technology from HP and IBM.

Can you talk about the EPEAT system? How does that work?

Like the EnergyStar system when you buy a washer, the EPEAT sysem is for technology products, and it rates their environmental [impact] with a bronze, silver or gold star. Vendors like Lenovo and HP have invested a lot in it. We also have now, on our Web site, EPEAT ratings, which are based on heat consumption, recycled parts. It's quite important to customers, so we launched that Web capability. We're the only ones I know of that have that product search capability.