EMC opens a distribution channel

EMC previously distributed direct via its 16 reseller partners in Australia. The vendor took on ED in 2000 as a proposed third-party distributor, but the agreement never became effective as EMC had at that time no products suitable for ED's reseller base.

However, October's CLARiiON release meant EMC and ED finalised a distribution agreement on 26 May after seven months of negotiation, a spokesperson for EMC said.

EMC channels manager David Henderson said the deal positioned EMC to take a big SMB bite out of an Australian market for storage products potentially worth $US200 million.

He would not say exactly how much of the market EMC expected to take, but said the company believes the Australian storage market will grow at 65 percent compounded for the next five years.

'This [deal] comes on the back of the new CLARiiON release in October, which has probably been the most successful product we've launched, accounting for 50 percent of our revenue over the last nine months,' Henderson said.

Some 4,000 ED resellers would assist EMC to reach companies with 100 staff, Henderson said.

'ED has a really strong focus on the network environment,' Henderson said. 'Two years ago, if a company had less than a million dollars, you never came to EMC … Now, we're also talking about every company with over 100 people.'

Gavin Lawless, communications division manager at ED, said the distributor had not previously been strong in products for the SAN environment but saw the sector as potentially lucrative. 'We are building our storage partnerships, which today we see as an opportunity to sell additional product,' he said.

Lawless said supplying CLARiiON would complement ED's agencies with Microsoft and Cisco. 'We have historically been stronger in software but we are moving more into hardware,' he said.

EMC in the US announced in early May it will resell and support a co-branded version of Cisco's MDS 9000 family of Multilayer directors and fabric switches. As part of the deal, EMC plans to develop software applications hosted on the MDS 9000 platform.

Around the same time, EMC also signed an agreement with Microsoft to allow it to produce Windows-based storage products for the low end of the market. 'These three [announcements] contribute to strengthening EMC's position in the NAS market and commitment to address a broader range of customer needs,' Henderson said.

He said EMC had no plans to further expand its relationships with the Australian channel by taking on more distributors.

EMC in the US turned a profit in its first quarter, following a series of poor quarterly performances. It has been reported that the storage vendor's fortunes still rely on high-end storage hardware, although the company's performance in software and services has improved.

In the quarter to 31 March, EMC reported $US1.38 billion in revenue, six percent more than the $US1.30 billion it reported in the same quarter last year. First quarter net income was $US35 million, or US2 cents per share, compared with a loss of $US77 million, or US3 cents a share, in the year-ago quarter.

Meanwhile, ED earlier this month signed a deal to distribute Wyse thin clients, and said it was seeking new vendors to target specific market sectors.