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8/16/2010
09:54 AM
George Crump
George Crump
Commentary
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Is Dell Set To Become A Storage Juggernaut?

Dell today announced its intention to buy 3PAR. Assuming for a moment that everything goes through and Dell is successful at the integration strategy they suddenly become a force to be reckoned with in the storage industry. The combination of 3PAR, EqualLogic, Ocarina Networks all supported by Perot Services makes for a compelling combination.

Dell today announced its intention to buy 3PAR. Assuming for a moment that everything goes through and Dell is successful at the integration strategy they suddenly become a force to be reckoned with in the storage industry. The combination of 3PAR, EqualLogic, Ocarina Networks all supported by Perot Services makes for a compelling combination.I met with Dell at their campus in Round Rock last week and was impressed at how seriously they are taking the storage market. They are a team that seems to have a good focus on what their specific opportunity is. They also are very good at keeping a secret. There was not even a hint of the 3PAR purchase. In the spirit of disclosure both 3PAR and Ocarina Networks have been clients of Storage Switzerland.

With the 3PAR systems in the portfolio they have a solid product lineup top to bottom. Dell's own entry level systems fits well with the entry level part of the SMB market, the mid tier is well covered by the EqualLogic products and now with 3PAR they have something that should appeal to the high end enterprise. If they are successful in integrating the Ocarina deduplication technology across all of these platforms they can provide an end-to-end deduplication message that is going to cause competitive problems for anyone in the space.

The combination of 3PAR and EqualLogic gives Dell a strong block storage platform. As we discuss in our recent article, "A Case for Block Based Storage In Virtualized Environments", while NAS is getting a lot of attention as a solution for virtualized environments block storage can still have a roll to play. Dell may be able to respond on the NAS side as well, another acquisition that does not get as much attention is their purchase of Exanet. If they can round out the Exanet technology they could be very competitive in that market as well.

Normally I tend be fairly negative toward these types of acquisitions and its fair to say I am still skeptical. The conventional wisdom is that the EqualLogic purchase has been wildly successful. In my opinion though that was a natural fit for Dell, and they'll admit it. These latest rounds of purchases; Perot Systems, Ocarina Networks and 3PAR will be a greater challenge. To be fair there is not much overlap between the 3PAR and EqualLogic market places and the Ocarina integration, if pulled off correctly, should be complimentary across the board. It all comes down to execution. I can't argue with Dell's selection of companies. They have selected great puzzle pieces and that is half the battle, the next half is how well do they integrate these technologies.

What does the competition do? Most of them will indicate that they already have the components that Dell is claiming to bring together. Others will stay focused on providing a single solution that competes with just one component of the larger system's manufacturers portfolios. As we have stated in our article "Storage Vendors, The Deduplication Stakes Are Raised", a crystal message here is that deduplication on primary storage is a must have capability for manufacturers.

In the end it really comes down to you the storage managers within the organizations that these suppliers are selling to. Do you see value in buying from a single vendor with the hope of future integration or would you rather have a product from a vendor solely focused on a particular product and market?

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George Crump is lead analyst of Storage Switzerland, an IT analyst firm focused on the storage and virtualization segments. Find Storage Switzerland's disclosure statement here.

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