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EMC, Dell Keep Dancing

Dell Computer Corp. (Nasdaq: DELL) announced Wednesday that it has begun manufacturing EMC Corp.'s (NYSE: EMC) CX200 entry-level storage array, which it will bundle with Oracle Corp. (Nasdaq: ORCL) or Microsoft Corp. (Nasdaq: MSFT) database software -- and sell for significantly less than EMC is charging for the same product (see Dell Starts Making EMC CX200).

Dell's version of the CX200 storage system, configured for two PowerEdge servers with three years of service and support, is available starting at $19,500 for 180 Gbytes. EMC is charging 28 percent more -- around $25,000 -- for the same base hardware. Both firms will add software to the system boosting the cost further.

The tale is a familiar one, as EMC's idea of "low cost" doesnt always match up to everyone else's. The baseline pricing for its recently introduced Clariion ATA system, for example, is 35 percent more if you buy it from EMC rather than Dell (see EMC Backs Clariion Into ATA).

Dell representatives say this is entirely the point of the deal. Dell’s raison d’être is to drive down the cost of manufacturing by running systems through its low-cost supply chain model and, consequently, to lower the overall cost for customers. The products it manufactures from EMC are no different.

Customers unable to afford SANs to date are the target market for the CX200. "The healthcare and education sectors in particular can’t afford expensive storage systems," says Dell spokeswoman Michelle Hanson, "but these prices should change that."

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