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2/12/2008
07:03 PM
Terry Sweeney
Terry Sweeney
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Partners That Compete

I know cooperative competition is supposed to be a cornerstone of business today. Still, I have to wonder how much further down the path to recovery will Dell get before its primary storage partner EMC complains?

I know cooperative competition is supposed to be a cornerstone of business today. Still, I have to wonder how much further down the path to recovery will Dell get before its primary storage partner EMC complains?Dell raised an eyebrow or two when it paid $1.4 billion for iSCSI vendor EqualLogic last fall. After all, wasn't that redundant to a lot of what Dell and EMC jointly marketed? No, according to Dell execs, who emphasize the differences between the Dell/EMC line (better for cost-conscious Fibre Channel users) and the EqualLogic gear (for mid-range iSCSI customers looking to add virtualization).

Flash forward to today's M&A news where, among other deals, Dell said it will buy MessageOne, an e-mail archiving service provider, for $155 million. CDP vendor Atempo and storage resource management company TeraCloud also bought smaller e-mail archiving companies today, in separate deals.

So everybody's diving into the e-mail archiving pool, with Dell adding its voice to the growing chorus of those who believe software as a service (SaaS) is a smart business to be in. While this take on today's events tries to spin this as Dell's attempt to compete with Google and its newly revamped Postini services, that's not the whole story. MessageOne's customer base is mostly small and midsize businesses and it also competes with Microsoft, MessageLabs, and Yahoo's Zimbra unit.

And while not specifically geared to e-mail, recall that barely three weeks ago, EMC launched its Mozy Enterprise service for online backup of desktops, laptops, and servers.

In other words, another place for Dell and EMC to step on each other's toes.

The good news is, they have another three years before their partnership expires to find a way to cooperate and compete. Analysts point to what a powerful distribution arm Dell is for EMC's gear, and they say EMC will tread lightly so as not to disrupt the goodwill there.

Since Dell's got the cash and the will to make more acquisitions, it will be interesting to see what it buys next. A virtualization company to compete with VMware, or maybe a data life cycle management startup? Nothing's off the table, apparently, in this era of co-opetition.

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