All the IT world already knows it: Dell wants to buy Compellent. Many observers consider this acquisition a plan-B after the lost bid for 3Par some months ago but I think something different, here is why:
first a brief recap of Dell’s storage business
at present, 50% of the Dell’s storage business is made by selling EMC stuff and 90% of this sales are CX related (just10% is VMax). Moving from a reselling agreement with EMC to a fully owned product (and Compellent would be perfect in this role) will drastically increase, and at once, profits granting a fast ROI. On the other hand, if Dell acquired 3Par (a very high end product), the 10% of VMax to start from would have a very tiny footprint to justify the amount HP spent (2.3 B$): nor Dell still hasn’t a prepared channel and direct sales forces to sell 3Par from day 1. Compellent will allow Dell to build an enterprise storage sales team (as well as a partner channel) and start an attack to midrange storage and the high end one.
easy to start the new business
Compellent already shares the Dell’s way of thinking: all standard components! Starting the new Compellent business for Dell will be very easy: Compellent uses very standard parts to build its product: server from Supermicro, HBAs/CNAs from Qlogic, disks from Seagate/STEC, disk shelfs from Xyratex. Dell has the servers and the same suppliers. I’m sure that we will see Compellent on Dell’s hardware in few months.
Compellent has the roadmap, Dell has the money
Compellent’s fully virtualized architecture is evolving very fast. They started years ago with thin provisioning, full wide striping, smart snapshots and replica features and, of course, the most famous one: automated tiering. Last month we saw the introduction of Live Volume (a feature that sets an higher flexibility standard allowing LUNS to be spread among different arrays): it is the base functionality to federate controllers. In the next future we will see many enterprise storage features innovations. Buying Compellent Dell saved a lot of money (in comparison with HP/3Par) this money could be used to foster R&D and integration with other brands they recently acquired!
yes, it’s a win-win deal
Fast ROI, new opportunities and a growth path for Dell in storage and enterprise field. A stable, certain and safe growth, a strong backend, a huge direct sales team and channel for Compellent.
who lose from this deal?
The only name that comes to my mind is EMC. I don’t know the terms of the reselling agreement between EMC and Dell but I don’t think that EMCers will be happy to definitively lose their biggest partner of the world.
disclaimer: I work for an italian Dell and Compellent VAR. I don’t own neither Compellent nor Dell stocks. Opinion expressed above are solely my own and personal.
