If Dell buys Compellent, it loses EMC partnership

Dell will have a difficult time integrating Compellent's technology into its portfolio

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Compellent sells SANs and the software to manage them. Most notably, the company offers software that automates the movement of data between tiers of storage. For example, Compellent's Fluid Data technology allows IT administrators set policies that place the highest priority data, such as the data in relational databases, on expensive high-performance solid-state drives, while placing less crucial data, such as e-mail messages, on less expensive high-capacity serial ATA (SATA) drives.

Compellent's technology also offers thin provisioning, a means by which administrators can increase the utilization rates of their storage by allocating only what is needed by server applications instead of the more common practice of overprovisioning capacity.

Compellent last month announced the latest version of its SAN technology, Storage Center 5.4, which incorporates several hardware upgrades and adds storage virtualization to its bag of software tools. The new virtualization software allows two Compellent SANs to be seen as a single pool of storage by application servers; it also allows data to migrate seamlessly between them.

Compellent is debt-free public company and sells its products exclusively through a channel sales network in 35 countries. The company said its SANs are installed at 3,000 customer sites.

If Dell acquires Compellent, it would face an uphill battle to integrate the technology into its current product line. In 2007, Dell purchased EqualLogic, an iSCSI SAN vendor whose products are designed for the same midrange market as Compellent's products. Last month, Dell reported its sales of midrange iSCSI SANs from its EqualLogic line were up 66% year over year.

"Although [Compellent] has recently expanded from SAN into NAS with the help of open-source software, its architecture remains limited to general-purpose environments," said Paul Mansky, managing director of equity research at Canaccord Financial. "Scalability challenges inherent to the architecture have historically precluded Compellent from engaging in an enterprise environment."

In all likelihood, Dell would not cannibalize its own midrange sales and would instead need to take some of the $1.6 billion it saved by not purchasing 3Par and invest it in beefing up Compellent's products for higher-end customers.

"It's a five-year plan either way," said Taneja.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian, or subscribe to Lucas's RSS feed . His e-mail address is lmearian@computerworld.com.

Copyright © 2010 IDG Communications, Inc.

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