Dell To Buy EqualLogic

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If it's true that the typical CEO makes only one or two major strategic decisions a year, then Michael Dell has it covered for the remainder of the decade.


Dell's decision to plunk $1.4 billion for storage networking firm EqualLogic, the largest buyout for Dell to date, makes it loud and clear that the company is more than serious in its quest to expand beyond PCs and servers and into end-to-end enterprise solutions.


And on the face of it, storage networking makes a lot of sense for Dell, considering that storage systems are one of its fastest-growing segments and there's no sign that demand from small-to-medium sized businesses is letting up. Adding a networking component means the company can provide a fully integrated solution without forcing customers to pony up for consultants and storage specialists to bring it all together.


It also means that the cost for iSCSI SANs, EqualLogic's specialty, are likely to go down, according to analysts quoted in InformationWeek. Dell has made a pretty good living at undercutting rivals in the PC and server markets, so it wouldn't be a surprise if they brought the same approach to iSCSI. Indeed, the relative cost benefits of iSCSI vs. Fibre Channel and Infiniband is probably what attracted Dell to EqualLogic in the first place.


The deal is expected to close early next year. At this point, it's unclear how this will affect Dell's ongoing relationship with EMC, which helps bring that company's iSCSI and other products to SMBs through its sales channels.