Compellent Comes Out Selling

Startup banks on innovative sales strategy to try to survive in a sea of SAN competition

February 27, 2004

2 Min Read
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Startup Compellent Technologies Inc. today unveiled its first product five months after it started selling the modular SAN system (see Compellent Launches Storage Center).

What's this? Sales first, then hype? In an odd reversal of the "brag first, deliver later" approach favored by many startups, Compellent put together a channel partner program and lined up customers before going public with its product (see Compellent Seeks Resellers).

Compellent now has 18 partners in 13 North American cities and plans to stick exclusively with indirect sales for the foreseeable future. It claims more than 35 customers, including HighJump Software , Ohio State University, and Oppenheimer Wolff & Donnelly LLP.

So much for sales. Now, the hype: Compellent calls its SAN product "Storage Center" and bills it as an open platform that allows companies to mix and match Fibre Channel, iSCSI, and SATA drives, controllers, and enclosures. To this Compellent has added mirroring, replication, resource and storage management, and scaleability software. Compellent hopes to gain traction in the small to medium enterprise (SME) market with its modular system, then capitalize on repeat business.

"It's not a revolutionary design," says Enterprise Storage Group Inc. research analyst Peter Gerr. "They've pulled together a lot of disparate pieces and integrated them, instead of leaving integration to their partners or customers. It limits choices customers have to make."Compellent won't divulge pricing, but marketing VP Gary Orenstein says it's "under six figures" for a starting configuration. Compellent's goal is to be priced lower than established players.

That lowball pricing may be a necessity. Compellent's entering a market that's rapidly filling up with SAN systems from big players such as Dell Computer Corp. (Nasdaq: DELL), EMC Corp. (NYSE: EMC), Hewlett-Packard Co. (NYSE: HPQ), IBM Corp. (NYSE: IBM), and Sun Microsystems Inc. (Nasdaq: SUNW), not to mention private companies 3PAR Inc. and XIOtech Corp., which got the jump on Compellent with their own SANs.

Still, Compellent's founders – CEO Phil Soran, COO John Guider, and CTO Larry Aszmann – think the world can happily accommodate yet another small SAN. Soran, Guider, and Aszmann also founded XIOtech and sold it off to Seagate Technology Inc. (NYSE: STX) for $360 million in 2000. They started Compellent in 2002, raised $23 million in two rounds of private equity funding, and hope to go public within five years (see XIOtech Founders Back in Business and Compellent Compiles $14M More).

A lofty goal for a young company. At least there's some evidence of customer traction, though it remains to be seen whether Compellent can shoulder aside the intense competition and make its dream come true.

— Dave Raffo, Senior Editor, Byte and Switch0

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