EMC's Decision To Cut Storage Ties With Ingram Has Distribution Rivals In Full-On Recruitment Mode

Few companies were hit harder by EMC's January decision to cut ties with Ingram Micro for its storage products than Computex Technology Solutions.

The Houston-based solution provider, No. 123 on the 2014 CRN Solution Provider 500 list, has been working with Ingram Micro for the past 27 years and was sourcing tens of millions of dollars of EMC business each year through the distributor, Computex CEO Sam Haffar said in an email to CRN.

But all that came to an abrupt end with EMC’s news that as of April 17 solution providers will no longer be able to purchase EMC storage products through Ingram Micro, although the distributor's relationship with EMC's VMware and RSA businesses will continue.

[RELATED: Ingram Partners Say EMC Making Big Mistake by Dropping Distributor]

EMC, Hopkinton, Mass., declined to comment for this story.

The company's decision, however, which came just seven months after EMC recognized Ingram Micro as its distributor of the year, has raised the stakes for EMC's remaining distributors -- Avnet, Tech Data and Arrow. All three have made a full-court press to win the business of EMC partners.

Avnet has been "extremely aggressive" in its pursuit of EMC partners that had been working with Ingram Micro, said Denny O’Connell, senior vice president and general manager of converged and data solutions at Avnet, Phoenix. The number of ex-Ingram Micro EMC partners signed by the distributor already has reached the high double digits, he said.

"We've got a great value [proposition], and we'd like to pick up as much of that business as we can," O'Connell said. "We hope we can have them come over to Avnet, and we hope we can figure out how to help them grow and make it a win for them, a win for us and a win for EMC."

For Computex's Haffar, though, the decision of which distributor to partner with for the EMC storage business came down to Arrow and Tech Data since the solution provider already was working with both companies. Computex ultimately opted for Tech Data, due to what Haffar called the distributor's executive-level relationships, strong technical team and good EMC resources.

Computex also was able to retain the special EMC pricing it had with Ingram Micro, Haffar said, and is seeing a smooth transition in moving its EMC business to Tech Data.

Tech Data's sales and product marketing teams have been contacting Ingram Micro's EMC partners and trying to convince them to make the switch, said Chuck Bartlett, Tech Data's senior vice president of Advanced Infrastructure Solutions. The Clearwater, Fla.-based distributor's selling point has been its strength in the midmarket business segment, Bartlett said.

Bartlett said the distributor has persuaded a large number of Ingram Micro's EMC partners -- although he declined to specify exactly how many -- to commit to Tech Data. Most of those solution providers already had a relationship with Tech Data around other vendors or product lines, but some had never before worked with the distributor, Bartlett said.

"We're working very hard in conjunction with EMC to contact those folks and convince them that we have the best value [proposition]," Bartlett said. "We want to be the beneficiary of as much business as we can."

Arrow, for its part, has declined to disclose the number of solution providers it has recruited or provide details on its strategy for attracting Ingram Micro's EMC partners.

"The solution providers affected by this action will need a distributor to transact business," Howard Goldberg, president of Englewood, Colol-based Arrow’s North America Enterprise Computing Solutions business, said in a statement. "As a result, we’re speaking with them to be their distributor of record for EMC product.’

One executive at an Ingram Micro partner, who asked not to be identified, said the company sources $5 million to $10 million of EMC business each year through Ingram Micro and has been wooed by all three distributors.

Key to the ultimate decision will be the cultural fit, interpersonal relationships, execution ability and financial assistance around rebates, co-op and certifications, the executive said. A number of distributors are offering additional rebates if a solution provider commits its EMC business as well as business from another vendor, the executive said.

Ingram Micro realizes that partner defections are a possibility anytime a relationship with a vendor goes south, but definitely doesn't want that to happen, said Paul Bay, Ingram Micro's president of North America Technology Solutions. He emphasized that EMC only made up a very small piece of Santa Ana, Calif.-based Ingram Micro's $17 billion base of offerings and services in North America.

"One single vendor's decision is not going to change our strategy," Bay said.

Ingram Micro has augmented the loss of EMC's storage technology by redeploying resources to strengthen the value proposition around some of the other core storage vendors it still does business with, Bay said. He touted the technology and integration capabilities of the storage offerings from IBM, Cisco, Hewlett-Packard and Dell, adding that emerging vendor Nutanix also has a deep storage portfolio.

"We consider EMC one of our most strategic vendors," Bartlett said. "None of that is going to change going forward."

Avnet's O'Connell said EMC made it clear that cutting ties with a distributor was not going to be a regular occurrence. Still, O'Connell said the move was a wake-up call for the company to ensure that its alignment with EMC is tight, and confirm that Avnet is absolutely clear on what EMC's strategic direction is and what its expectations are for distribution.

"I think our relationship with EMC now is quite good, but it is always a requirement to prove that out every day," O'Connell said. "There is no entitlement in business, and you constantly have to be adapting."'

PUBLISHED MARCH 17, 2015