SimpliVity CEO: Dell-Nutanix Deal Is A Channel End Run

SimpliVity Chairman and CEO Doron Kempel is criticizing hyper-converged infrastructure rival Nutanix's OEM deal with Dell as an end run around the channel.

"We didn't consider nor would we consider a deal with Dell," said Kempel in an interview with CRN at the Axis Business Solutions Summit in Ogunquit Maine, where he addressed about 60 Axis customers. "That is an OEM deal. What do OEMs do at the end of the quarter? They go around the channel."

Kempel was speaking about a long-standing issue partners face with customers scrambling at the end of the quarter attempting to get better pricing directly from an OEM vendor. "VARs register an opportunity and the last week of the quarter the customer checks with the OEM on price, and the OEM can't resist," Kempel said. "So they go around the channel."

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Dell inked a deal in June to OEM Nutanix technology. Under the agreement, which even some partners have singled out as opening the door to potential channel conflict, Dell will integrate the Nutanix software stack on Dell servers and sell it direct or through Dell channel partners.

Ironically, the SimpliVity OmniCube, which runs on standard x86 servers, was designed to run on Dell servers and still runs on standard Dell systems.

Simplivity, however, inked a deal just last month to team with channel stalwart Cisco Systems to bring to market a SimpliVity OmniStack Integrated Solution with Cisco UCS that combines SimpliVity's OmniStack software and its proprietary hardware card with Cisco UCS C240 rack-mount servers for sale through Cisco solution providers.

"Our strategy is all about the channel," said Kempel. "Strategically, we need to be very harmonious with the channel partners. Cisco is a great partner and the deal structure is very partner-friendly because there is no way to sell around the channel."

Dell Storage Executive Director Travis Vigil dismissed the claims of OEM channel conflict in an email response to CRN.

"The Dell XC Series of Web-scale Converged Appliances, based on Nutanix, will be sold by Dell sales teams and channel partners later this year," wrote Vigil. "Dell is complementary to Nutanix's channel with a strong deal registration process in place to avoid channel conflict. The XC Series is also part of Dell's broad SDS and converged portfolio, offering the channel and customers more choices and options."

Kempel, for his part, said he expects Dell's sales reps to sell the Dell Nutanix boxes direct. "There is no way for the SimpliVity Cisco offering to go around the channel," he stressed. "It needs to go through the channel."

Joseph Paquet, Axis Business Solutions vice president of vendor alliance and relations, praised SimpliVity as an outstanding channel partner. "SimpliVity is absolutely 100 percent channel," he said. "They have a great channel program, a great deal registration program and great back-end support from the sales engineers."

Since SimpliVity began shipping the OmniCube last April after 43 months of product development to provide a complete converged stack, it has shipped more than 1,000 systems, said Kempel. "The momentum is beyond what we expected," he said.

PUBLISHED SEPT. 12, 2014