Dell to pay $1.4B for storage virtualization vendor EqualLogic

Dell plans to integrate virtualization technology with its PowerVault MD family

Dell Inc. today said that it will purchase data storage provider EqualLogic Inc. for approximately $1.4 billion in cash.

The price Dell has agreed to pay for Nashua, N.H.-based EqualLogic, a maker of iSCSI storage-area network (SAN) virtualization technology, makes this the PC vendor's most expensive acquisition ever.

The deal is expected to be finalized sometime in January and has already been approved by both companies' boards of directors, according to Mike Artebury, director of storage operations at Dell.

Artebury said that EqualLogic's iSCSI SAN-based offerings will augment Dell's strategy of simplifying IT within corporate data centers and extending the company's footprint in the server virtualization market. "Storage virtualization helps drive simplification of IT and drives TCO [total cost of ownership] for customers in a positive way," said Artebury. "It also drives server sales for Dell and associated solutions around those environments."

Artebury said Dell plans to "exploit" EqualLogic's channel-only business model to attract new small to medium-size businesses while it incorporates its technology into Dell's core product offerings. In September, the vendor's CEO, Michael Dell, criticized large storage vendors for doing a poor job of supplying small and midsize businesses with effective downsized storage offerings.

A logical place to integrate EqualLogic's technology is on top of Dell's PowerVault MD platform and its family of modular storage products, said Artebury. The MD portfolio includes Dell's MD3000i, MD3000 and MD1000 storage hardware.

Despite aggressively expanding its virtualization capabilities, Artebury dismissed any notion that Dell will place itself squarely in competition with VMware Inc., a virtualization company that is majority-owned by longtime Dell storage partner EMC Corp.

"We're the No. 1 reseller of VMware and we feel that [EqualLogic] is really complementary to our leadership in that space," said Artebury. "Suffice to say we're not trying to [break into the virtualization] space but augment our technology and offerings [there]."

In the short term, existing EqualLogic customers can expect no impact on their products or implementations as a result of the Dell purchase, said Tim Yeaton, chief marketing officer at EqualLogic.

Copyright © 2007 IDG Communications, Inc.

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