Nutanix and the deal with the Dell-vil – a personal view

First of all kudos to Nutanix for their internal decision to inform the channel prior to the press release, which meant I could make this article timely rather than days after the event. Few vendors consider their channel is anything to do with their internal decision making, and while we may have no veto or input to a business decision, acknowledging we have a part to play is very important.

We may only be the size of tug boats compared to a supertanker, but supertankers can’t dock without tug boats.

If you have read my recent post you would have seen me live through my experiences with Dell equipment, how I supported the requirement of a Nutanix appliance to run their product, and why I thought it made sense. So hearing that Dell were going to OEM the Nutanix software in an appliance of their own caused more than a little trepidation for me. After all going from a heavily tried and tested platform tuned by a software vendor to one where software was applied to hardware with different components and firmware certainly dilutes my primary message in defence of the Nutanix appliance.

However, taking a step back it is important to reinforce that Nutanix is a software company, and indeed has been criticised for being ‘proprietary’ because it required a purchase of their appliance and there was no software only SKU. Starting to expand the range of hardware that runs the Nutanix software re-emphasises the “software-defined on commodity hardware” message of Nutanix – at the end of the day you will always need hardware, and it needs to be as generic as possible.

For the sake of their amazing support it is in the interest of Nutanix to enforce a strict reference architecture on any OEM hardware deal, so that the issue of finger pointing does not resurrect itself and kill the “one back to pat” USP that Nutanix has enjoyed to date with it’s one stop central support model. Vendors like VCE claim a one stop support system, but on escalation problems go back to their respective vendor 3rd levels and then it’s just like any other server/SAN solution. Level zero call centres really aren’t the solution.

So that’s my view on where I see Nutanix coming from with this decision, what about from the channel perspective?

I’ve always been guarded about the function of a channel with any vendor, and their actual buy in compared to what they say. My personal experience of Dell is that they talk a good game, but in practise as a small reseller trying to sell into a large customer you don’t already have a foothold in is almost impossible. Their account managers are generally at war with each other over commission, and all sorts of dodgy goings on seem to occur with their deal registration system.

I’ve had a 6 figure deal I engineered yanked out from under me when it was discovered the client had a deal reg posted to them by their account manager – even though they had no involvement in the project. Although I wasn’t actually banned from the sale Dell made sure the client’s direct prices were 5% lower than I could get even if I deal registered the solution. It’s not the only time this has happened, but was the one that sticks with me the most, for obvious reasons!

The practice of signing every business up as a partner, effectively wiping out the margin potential of any actual partner, is rife in Dell and shows a complete contempt for the efforts of a partner to resell Dell solutions into large organisations. It is now generally acknowledged that reselling PCs is pointless, as you can often buy them cheaper on the public website than we get in “premier” pricing as partners. Even with regard to servers it seems unless you can break the £10k deal reg minimum pricing is unlikely to be competitive with their regular deals or what any reasonable size business could get direct.

Then when you try and actually register a deal it’s often denied because one appears for that customer tied to their account manager – in one case I had one denied because it was SIMILAR to another company name at a completely different address! Dell deal registrations appear from this to be generic and long lasting, not project centric like Nutanix, although when filling out a Dell deal registration it implies otherwise.

This isn’t a problem only I have experienced either, and I’ve had a lot of conversations with Dell partners who feel similarly aggrieved, including Enterprise ones.

So while I broadly agree with the direction Nutanix is taking – ultimately to a software only SKU as long as you use HCL infrastructure – I am in a position of  selling a product with a defined hardware price, against what is basically now a competitor present in my entire target market that has the ability to loss lead it’s hardware to snag a deal.

Nutanix have informed me that everything, including from Dell, needs to go through the Nutanix deal reg protection system and therefore there will be no pricing advantages, but so many organisations have already purchased Dell equipment at some point that I imagine I have much tougher sells ahead of me; my Nutanix marketing may just lead to somebody picking up the phone to their Dell account manager, rather then responding to me.

I also have to wonder how Nutanix can guarantee that they can provide a level playing field to their direct partners, when a major partner has the ability to independently price hardware.

So I have to trust my in depth knowledge of the product – I run it in production after all – and my belief in and focus on Nutanix rather than having a range of competing products I resell, combined with my solution based approach to customer requirements, will enable me to continue to get a return for the very heavy financial and personal commitment I and my business have made to this vendor.

Time will tell.

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