Storage bust-up as EMC ends STME relationship

The longstanding channel relationship between storage vendor EMC and regional integrator STME has reached an acrimonious conclusion. EMC has announced plans to dissolve its 16-year relationship with STME in the Middle East, provoking a strong reaction from its partner.

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By  Stuart Wilson Published  April 26, 2006

The longstanding channel relationship between storage vendor EMC and regional integrator STME has reached an acrimonious conclusion. EMC has announced plans to dissolve its 16-year relationship with STME in the Middle East, provoking a strong reaction from its partner. EMC claimed that its decision to terminate the relationship with STME was due to an ‘incompatible strategy’. The vendor now plans to forge a relationship with an independent service provider to manage service and support for EMC products across the Middle East while simultaneously deepening its relationship with global and local resellers to serve its customers in the best way possible. STME has come out fighting, claiming that the termination of the relationship with EMC was a result of its steadfast commitment to providing customers with best-of-breed solutions from multiple storage vendors as opposed to focusing the vast majority of its efforts on pushing EMC products. Peter Aubrey, chairman and CEO at STME, stated: “We have done everything possible to continue our partnership with EMC, however we were unable to accept the single vendor strategy which EMC Middle East required. We are sure that our customers will recognise this and continue to show their trust and confidence in us.” “STME is disappointed to see one of its longest standing partners decide to end its association with us,” Aubrey added. “STME had made substantial investments to establish EMC in the region over the past 16 years and built a portfolio of the largest telco, finance, oil and gas and government accounts, trained technical and sales staff and provided second-to-none service for these customers.” “Through our strategic relationship with Dell, STME will continue to offer EMC technology and solutions to our customers and are still pleased to have a portfolio of leading technologies from HDS, Netapp, Symantec, Cisco, Sun, Brocade and McData and a team of architects who can offer solutions built around customer needs and budget,” he continued. “We are currently in the process of implementing several EMC solutions, and we also have several upgrades and support contracts to fulfil. We are confident that EMC will honour these agreements in order to best serve our joint customers,” Aubrey concluded. Mohammed Amin, general manager at EMC Middle East explained the thinking behind the decision to stop working with STME: “With all due respect to STME, we have an incompatible strategy with them. The way they position themselves in the market and to customers is not in line with the way we want to position EMC — as a vendor delivering information management solutions, not just boxes.” “I wanted STME to sell the EMC information lifecycle management story, not EMC as a box, which is completely different,” Amin continued. “STME was selling EMC hardware but they were not providing the true value of a solution to the customer and that is what counts for us — how our value reflects in customers’ bottom lines.” STME has deisgned and delivered some 215 EMC storage systems in the region. According to STME, its distribution contract with EMC ended in December 2004 and the two companies have been in negotiations since then. STME also holds in excess of US$4m of EMC stock across ten locations spanning seven countries in the Middle East. The integrator has seen record revenues in recent months, with sales spread evenly across its vendor portfolio. According to STME, sales for the first quarter of 2006 exceeded US$12m and no one vendor, including EMC, accounted for more than 20% of sales. In a prepared statement, STME claimed: “EMC has tried to convince us that STME should be wholly and exclusively committed to working with them and that our ties with all our other partners should be severed. We have struggled with this concept and the benefit of such a narrow and dependant strategy for STME because we have always prided ourselves on the fact that our primary commitment is to the customer.” “Our current position of vendor independence enables us to offer to our customers the ‘best fit’ solution regardless of brand, make or product and we are able to support that advice by professional services and technical expertise. As requirements from customers become more complex we believe that it is unlikely that any one vendor could provide the right answer to every problem and as such we have concluded that we can serve our customers best by retaining our independence,” the statement continued. EMC claims that the end of its relationship with STME will present no problems for its existing customer base, citing the fact that it was involved in most of the major projects that the integrator carried out and that customers can contact EMC direct. Amin also claims that EMC holds spare parts stock in the UAE, Saudi Arabia and Egypt alongside the stock carried by other authorised partners in the region, meaning continued rapid availability for customers.

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