Dell's Storage Strategy To Wean Itself Off Of EMC

Dell is laying out its storage strategy to: exploit the value of several recent acquisitions, expand its product lines and gradually (though not completely) wind down its reseller relationship with storage hardware vendor EMC. Dell's $960 million acquisition of Compellent, completed in February, gives it a multiprotocol tiered storage area network (SAN) product line that's a direct competitor to EMC offerings. Also, the data compression and deduplication software Dell gained with the acquisition of Ocarina Networks in July 2010 will eventually be included across Dell's entire storage product line.

"Dell is moving from being a company that sells storage to being a storage company," says Carter George, executive director of storage strategy at Dell, during an interview last week in San Francisco. He came to Dell through the Ocarina acquisition. While acknowledging that the Compellent deal means that Dell will probably be selling less EMC storage hardware, the two companies signed a new, five-year reseller agreement the week before. George declined to discuss the terms.

George laid out Dell's storage product road map that has been developed mostly through four recent acquisitions. In addition its acquisitions of Compellent and Ocarina, Dell paid $1.4 billion  for SAN hardware vendor EqualLogic in 2008 and $12 million for network-attached storage (NAS) vendor Exanet in February 2010. Exanet is a direct competitor NetApp, the market leader in NAS storage systems.

Acquisition activity in storage heated up last year when Dell engaged in a bidding war for high-end storage vendor 3Par; HP prevailed with a bid of $2.35 billion. With Dell's acquisitions, it now manufactures hardware based on the two principal types of storage platforms: SAN is also known as block storage and NAS is also known as file storage.
 
The idea behind the Exanet acquisition is to take the Exanet file system and make file-based versions of Compellent and EqualLogic hardware to be sold alongside their block storage systems. These systems should hit the market sometime in the first half of 2011, George says. The Ocarina Networks' compression deduplication software should be rolled out across all Dell product lines sometime in the second half of the year.

Dell calls its new storage strategy Dell's Fluid Data Architecture because it stores data across all architectures--NAS and SAN--and supports multiple storage formats, specifically solid state drive (SSD) flash-based, serial-attached SCSI (SAS) and Serial Advanced Technology Attachment (SATA). By supporting all those standards, "fluid" means "that the data flows to the right place," George explains.Dell's strategy of developing its own storage technology instead of just reselling EMC's is impressive, notes Natalya Yezhkova, research director for storage systems at IDC. "In the storage area, Dell is remarkably becoming a more dynamic player, offering solutions that are just emerging on the market like the object-based DX6000 line. That's not typical for Dell, which is known for its "wait and see, then come and conquer" approach," Yezhova said in an e-mail exchange.

Dell probably still needs EMC, she says, because while Compellent is a product similar to EMC's, "Compellent doesn't have a strong reputation of storage for mission-critical applications." Dell's George acknowledges that if a Dell customer asks for EMC storage, Dell will sell the customer EMC, but if the customer is open to suggestions, Dell will push Compellent.

"If a customer has 12 EMC boxes and the sale being discussed is to sell them box No. 13, maybe that would be a Compellent, but it's pretty likely it'll be an EMC," he said. "But if the customer is saying, 'I'm open to alternatives,' I think you're going to see us be zealous about Compellent because we do think it's a better product."

See more on this topic by subscribing to Network Computing Pro Reports Research: 2011 State of Storage (subscription required).