Dell Ups Its Storage Prowess with Compellent Technologies Buy

Written by Dave Courbanou 1
December 13, 2010

Straight from Round Rock, Texas, comes the news that Dell is set to acquire Compellent Technologies for its storage and virtualization expertise. Here's some insight on the deal, including how it could benefit Dell's growth and why storage VARs should care:

Straight from Round Rock, Texas, comes the news that Dell is set to acquire Compellent Technologies for its storage and virtualization expertise. Here’s some insight on the deal, including how it could benefit Dell’s growth and why storage VARs should care:

With the Compellent buy, Dell seems to be setting itself up for big things. Compellent’s package includes a virtualized storage platform along with a specific channel focus for Dell’s PartnerDirect relationships. Dell sees the expansion of storage products to partners as a strategic investment to provide more enterprise-class storage solutions as IT storage needs continue to skyrocket.

The Channel Perspective

But why Compellent, and why does the channel care? Compellent offers advanced automated data management features, which include tiering and thin provision, specifically geared toward the enterprise and large-scale cloud computing environments. Dell also believes the Compellent portfolio aligns with its “commitment” to provide customers open and affordable solutions, and it said so in the release announcing the buy. With Dell planning to maintain Compellent’s existing channel program, along with an extended agreement to resell Compellent technology worldwide, VARs have the potential to capitalize on an expanded and enhanced portfolio.

To be sure, Compellent seems channel-focused. The company is planning multiple partner conferences in May 2011 (more details soon…), an the channel partner program is clearly communicated on the Compellent web site.

Dell’s buyout of Compellent, which is expected to close early in 2011, will have Dell paying $27.75 per Compellent share, translating to $960 million, and an aggregate purchase price of nearly $820 million net of Compellent’s cash. Dell expects that the Compellent transaction will be accretive to Dell’s non-GAAP earnings by FY 2012. Compellent’s existing operations in Eden Prairie, Minn., will continue to be supported by Dell investments.

The Big Picture

With this latest move in the storage arena, it seems as though tech companies are setting their sights on increasing storage muscle. Storage is booming like crazy, and disk space is a hot commodity — how best to manage data storage efficiently is the new hot business model. After Dell’s dropped bid for 3PAR, what’s next after Compellant? CommVault and NetApp should have their eyes and ears open; they could be in IBM’s, Hewlett-Packard’s or even Cisco’s or Oracle’s sights. Even the New York Times suggests that as the race to cloud computing churns on, storage technologies will be sought after.

Bottom line? That’s good news for storage VARs and a wake-up call to any partners working with distribution companies to potentially specialize in data technology.

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