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To: SecularBull who wrote (9285)	10/3/2001 12:48:28 PM
From: stockman_scott	Read Replies (1) \| Respond to of 10934

Dell-EMC Alliance Rumors Swirl Ahead of Thursday Call... By Jim Seymour Special to TheStreet.com 10/03/2001 09:52 AM EDT thestreet.com When Dell (DELL:Nasdaq - news - commentary) holds its analyst call Thursday -- changed two weeks ago from a face-to-face meeting to a conference call in order to ease air-travel worries -- the company may take down its third-quarter earnings estimate from the consensus 15 cents a share and will probably actively guide analysts down for its fourth quarter, ending January 2002. But perhaps more interesting will be a widely rumored announcement about a new deal with storage giant EMC (EMC:NYSE - news - commentary) to resell, in some form, Dell-branded EMC low-end and midline storage units. The two companies have worked together before, and Dell sold EMC units under its PowerEdge brand, but that arrangement ended more than two years ago. Dell then bought ConvergeNet, a small storage-systems developer, for $340 million in 1999 and used its San Jose, Calif., office as a base for getting back into the storage market. But that office was closed in May. The acquisition, a rare event for Dell, has generally been seen as a failure. ConvergeNet products never appeared in the Dell product line. EMC's midline Clariion units would be an ideal fit for Dell, which can leverage its considerable customer base in servers by adding storage systems and subsystems. Dell spokesman Jim Mazzola declined Tuesday afternoon to confirm the company's plans to announce an EMC deal. The Magic Touch? Dell could be an important partner for EMC, which has historically sold high-end storage systems. Dell routinely "touches" many small- to medium-sized companies that EMC couldn't hope to approach, given its selling costs. That concept of a customer "touch" is becoming an important one. I first heard the term a decade ago in the context of internal company support for its computer users. A "touch" meant the tech-support shop had to actually go out and touch a user's computer, printer, etc., for repairs or changes, rather than handling the issue over the phone. But "touch" quickly became a part of selling strategies as well. With a call or visit to a prospect now costing in the hundreds of dollars, companies such as EMC have to focus their guns on those customers likely to produce a significant order without too much subsequent hand-holding. The kinds of storage systems typically bought by midsize companies and the longer selling cycle involved with those customers make EMC's gold-plated sales approach uneconomic. But Dell, which talks every day with tens of thousands of customers and has hundreds of thousands of midsize "live" customers on its books, would find it much easier to sell to those businesses. And Dell, of course, would happily pocket the thinner margins on relabeled EMC units, seeing the revenue as found money. A remaining mystery about a Dell deal with EMC is the exact configuration of the deal. Dell is unlikely to simply act as an authorized reseller, but rebranding the existing EMC Clariion units may not be the answer, either. In April, Sony (SNE:NYSE - news - commentary) signed on with EMC as a Clariion reseller, though only for specialized systems sold with its XPRI digital video-editing system for commercial broadcasters. -----------------------------------------------