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Dell's Compellent Deal Should Hurt, Not Kill, EMC Relationship

Dell's proposed acquisition of Compellent Technologies should mean that the EMC Clariion relationship, which took a big hit with Dell's acquisition of EqualLogic and suffered another body blow when Dell lost out to Hewlett-Packard in the 3Par bidding war, is pretty much over. Dell is seeking to acquire all outstanding common stock of Compellent for $27.50 per share, a deal valued at more than $800 million.

During the Oct. 19 conference call to discuss its Q3 earnings, EMC executives said the Dell relationship had suffered a setback because of the 3Par move and that the Clariion line was only holding its own, after being hit by Dell moving onto EqualLogic.

Just over two weeks ago, Compellent announced plans to reach out from its SMB base with enterprise-friendly enhancements to its storage management software, such as server virtualization integration. It also announced a new controller platform that supports everything from FCoE to 10Gb iSCSI, and from 6Gbps SAS drives to a 2.5-inch 24-bay enclosure. Compellent also announced the release of Live Volume software, which acts as a storage hypervisor and addresses a number of data mobility issues, including moving storage for application changes, maintenance, planned outages, load balancing and disaster avoidance.

According to a number of analysts, the pending Compellent deal is good news for Dell and bad news for EMC. "I'm a big Compellent fan," says Howard Marks, chief scientist at Networks Are Our Lives. "Storage Center is a good fit for the Dell customer base. It's a step up from EqualLogic in scale up." Since Storage Center is a direct competitor to Clariion, it will not have a positive effect on the EMC relationship, he adds.  "However, Dell sells a reasonable amount of Symmetrix, and Dell will continue to. Despite Compellent's aspirations to enterprise scale, Storage Center isn't Symmetrix or even 3Par scale."

Deni Connor, principal analyst at Storage Strategies NOW, says the Compellent acquisition would allow Dell its own mid-range SAN. "It will also signal a death knell to Dell's relationship with EMC for Clariion storage."

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