EMC and Avnet launch "radical" channel-only strategy for VSPEX Blue

EMC and Avnet launch "radical" channel-only strategy for VSPEX Blue

EMC shifts channel value-chain with Avnet manufactured products under an exclusive A/NZ partnership

Avnet's Michael Costigan and EMC's Gil Shneorson (inset)

Avnet's Michael Costigan and EMC's Gil Shneorson (inset)

EMC and Avnet have turned the converged infrastructure channel ecosystem on its head with an exclusive channel-only partnership which crowns the distributor as manufacturer and gatekeeper of the new VSPEX Blue product in Australia.

Under the deal Avnet has become the sole distributor of the new hyper-converged infrastructure appliance VSPEX Blue and will have the ability to sell the solution globally.

EMC will not sell the the product direct, even to tier one resellers.

It is the first major "relationship" between EMC and Avnet in Australia and it is also the first of its kind where the distributor assembles, integrates and sells the solution.

The strategy could be seen as an attempt from EMC to differentiate the product in a crowded market with technology, EMC support and pushing the value chain closer to the end-user - therefore giving more margin for resellers.

EMC vice-president and general manager VSPEX, Gil Shneorson, told ARN it was a very different way for any vendor to interact with the channel.

"It actually has never been done before in our industry," he said.

"For Vspex Blue everybody will buy from Avnet. EMC will not sell direct from tier one VARS or end users. You are either a partner or you're not. And we have briefed our teir one VARS and they accept it.

He said the partnership was ultimately designed to drive cost out.

"When you get the value chain closer to the end-user, good things happen for everybody along the way," he said.

"Everybody understands that so they accept that and where the relationships don't exist we are going to facilitate that.

"We want to take care of our tier one partners just as well - these are very important relationships for us.

"There are multiple products they can buy from distribution, in this case they will have to buy from distribution."

Avnet APAC vice-president of market and business innovation, Michael Costigan, said it was first for a solutions distributor like Avnet.

"Typically you look at a solutions distributor and think sales marketing logistics, that's what a distributor does," he said.

"But this partnership with EMC - we act like a manufacturer.

"We actually participate in finishing that product, in integrating, in assembling that product, which allows VARS to take that to market. That's exciting for us.

[x/hd]Converged infrastructure

He said converged infrastructure was a big play for Avnet.

"Being a hyperconverged solution this is a first for us," he said. "The fact that it's a channel-only solution, that fits right into the sweet spot for us.

"Now we are going to go out there and educate as many partners as we can across the country to drive this solution."

Costigan said Avnet was not a "full-blown" EMC distributor.

"This is our first relationship with EMC in Australia and New Zealand, so that's exciting for us. It's also exciting times for the channel here in Australia and New Zealand.

"The way that we are going to market as a distributor and a supplier that's really exciting from our perspective, the way we are working together."

The new appliance which integrates with VMware's EVO: Rail software converged stack, EMC management software and a white-box server is the storage vendor's first foray into a high-growth market which includes Nutanix and Simplivity.

Read more: Dual APAC promotions for Avnet

Shneorson said EMC had cleared the way for resellers by changing the value-chain.

"Avnet has Avnet Embedded as part of the organisation," he said. "They have logistics capabilities, they have manufacturing capabilities and yes we have been partnering with Avnet as a distributor, but Avnet as a company is so much more than just the distribution part.

"So what if we could take a few of the elements that we would be traditionally doing and partner with Avnet so they could add more value.

"And what if in doing so they could also have control over the downstream pricing so they could be compensated for that value.

The end result was the decision to engineer, design and brand and sell a product, but only partner with a few global distributors.

"What if those organisations could procure the hardware directly from the source versus EMC buying and selling it and making margin on it," Shneorson said.

"Under our supervision and with our automation create the final product and really take it to market, in any market they want to operate in without any restriction.

"But because it has been created under the EMC umbrella with EMC control we would then take the support on it."

He said this was a "reseller OEM hybrid model".

"So the customer gets an EMC product, with EMC support and EMC sells software design and services.

"And Avnet participates in the creation, and has control of downstream pricing, like an OEM, so win, win, win. Everybody wins."

He said EMC was doing everything in its power to become number one in the converged space.

"No company would have gone through such a radical change of strategy if it wasn't important, so we are very serious about this.

"Any competition from EMC products has been removed. All channel, all wide space, no other options in the space, no other organisation that may sell an alternative.

"It's an opportunity without any constraint. Everybody is aligned to support the channel. Nobody can sell it but the channel."

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Tags michael costiganVSPEX BLUEAvnet APAC vice president of market and business innovationEMC vice president and general manager VSPEXGil Shneorson


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