With 3Par Acquisition, Dell Shows They Are Serious About Storage

Over the past few years, Dell has taken carefully measured and calculated steps with its storage business, namely the acquisition of EqualLogic and the pumping up its engineering and sales organization to support greater storage sales. Now, Dell makes another smart move with the acquisition of 3Par, the 10 year-old enterprise storage provider that was first to deliver thin provisioning within high-end storage arrays, as well as developing abstracted storage virtualization techniques that allow rapid changes in storage configuration and RAID protection without the need to backup, or restore active data. There should be no remaining doubt that Dell is extremely serious about its storage business

When Dell acquired EqualLogic, many in the storage industry saw it as a slight to EMC. In my opinion, it is hard to fathom how EMC will not see the acquisition of 3Par as another slight, even though the company may say otherwise publicly. In fact, it was back in May at EMC World where Joe Tucci informed a gathering of storage industry analysts that the relationship with Dell seemed to be "back on track," after a  bump in the road caused by the EqualLogic acquisition.  

Perhaps, even with firmware and hardware advancements within the CLARiiON product line, Dell does not see the line as being as advanced, utility-like and flexible enough for a high-end enterprise class storage offering for its enterprise and growing cloud-oriented total solutions offerings. From a storage products positioning perspective, Dell appears to have now covered their bases with EqualLogic for the low-end to mid-range and now 3Par for the medium-enterprise to high-end enterprise data center/cloud requirements.

Some industry insiders have previously expressed that a Dell purchase assured the death of the product and its technology. Many were quick to provide example after example of where Dell had fallen down in years past. Clearly, Dell did a 180 degree turn of post-acquisition strategy when it purchased EqualLogic and the storage division has blossomed since the acquisition. A source at EqualLogic who would prefer to remain anonymous told me that he believes the EqualLogic success was enabled, in part, to Dell management, "providing us the time and space to enhance our functionality and deliver a solid, well tested product."  

In speaking with a handful of EqualLogic customers over the past two weeks regarding purchase decisions for the VMware VDI space, these customers seem to echo the EqualLogic employee's view.  One customer, within the financial services industry, recently told me, "We are pleased with the new EqualLogic storage arrays and the quality seems to be a lot better now than years ago." Certainly this is not an endorsement for the product, but Dell is taking the right steps to provide a quality product for low-end and mid-range users who can benefit from SAN but were prohibited by the higher cost of Fibre Channel SANs.While the folks at 3Par have been fairly tight lipped, I have it on good word that they are excited about the opportunity that comes along with a Dell acquisition (an instantly expanded global sales and support model, perhaps an R&D dollar infusion, an overall sense of well being, and acceptance into a larger corporation...oh yeah, and perhaps a trip or two, to Austin, Texas).

From an industry consolidation perspective, there's no doubt that the acquisition of 3Par takes another significant player off the "independent storage provider" board. Sales of InServ will naturally increase given the shear market presence of Dell; however, there is validity to the thought that a bit of a vacuum is now created for another growing and maturing startup to fill as 3Par assimilates into Dell. A few names come to mind, but is the time right for more focus on Compellent and its storage offerings? Also, could there be additional storage acquisitions before the end of the year? Not being a betting man with money, I would bet a cold Pepsi on it.

With the acquisition 3Par, Dell continues to demonstrate its seriousness about its storage business, its ability to move forward and leverage available technology and not wait for partners where it doesn't make sense, and provide its customers with innovative storage technology solution choices. Will the road be paved with gold for the 3Par entity? Absolutely not. Storage buyers will still want to fully understand the differentiation between multiple storage product lines, and they will want to clearly understand the 3Par solution as they deploy mission critical apps in the data center and cloud environments. Dell and 3Par have a lot work to do ahead of them. Just how quickly and effectively they execute on sales, systems engineering and customer training and awareness will have a direct effect on how positive the outcome is of this acquisition.