In its quest to establish a channel base in North America, Dell Computer has entered into a definitive agreement to acquire Nashua, N.H.-based EqualLogic, an iSCSI SAN vendor.
The US$1.4 billion, all-cash deal is intended to enhance the company’s storage portfolio and better position Dell in the growing server and storage virtualization markets according to Dell’s new channel chief, Greg Davis.
Davis also hopes to learn from EqualLogic’s channel strategy and programs to assist him in building-out the former direct vendor’s own official channel program, which is expected to be announced before the end of this year.
“This gives us an additional opportunity because EqualLogic has been marketing products through the channel exclusively,” he said.
EqualLogic has 500 channel partners and more than 3,000 customers, including operations in Canada.
“As we prepare to lay out our strategy for the coming years with partners (this acquisition) will enable us to expand the business off of what EqualLogic has done, focused primarily on storage and virtualization. It is also a great opportunity for us in the channel and with solution providers. This validates our statement and commitment to doing a better job in the channel with our partners,” Davis said.
Davis said he will be looking at EqualLogic’s channel program to learn more about it and possibly include some of its best elements into the Dell channel plan.
“Our goal for the channel business is around building strategic situations like virtualization and storage. EqualLogic has a set of partners that are solutions-focused and that will play well for what we want in our channel business,” he said.
Davis believes EqualLogic’s product portfolio can provide solution providers with improved profitability and better solutions for their customers. He added the storage portion of Dell’s business has been the fastest growing area for the company this year.
“EqualLogic is in the iSCSI SAN market and they give us a rich IT portfolio and the ability to grow our storage business,” he said.
The Dell acquisition is viewed as a positive for the market by LeftHand Networks, a Boulder, Colo.-based competitor in the storage space. LeftHand president Bill Chambers said it’s a validation of the iSCSI SAN market, adding his company is now the largest remaining independent and channel-centric player in the space.
“The Dell/EqualLogic announcement clearly validates the market for iSCSI SANs and sets a premium valuation for the market leaders,” said Chambers. “Inquiries about LeftHand’s Advantage Partner Program have been brisk. LeftHand has strong channel relationships and remains 100 per cent committed to our partners’ success, without introducing potential channel conflict.”
EqualLogic technology is expected to be integrated into Dell’s PowerVault line. Dell will market EqualLogic products under its own brand name. The products will be available to the channel and direct from Dell.
Davis said Dell’s acquisition of EqualLogic will not have any impact on its current relationship with EMC. “We have a strong global partnership and we will continue to grow the fibre channel SAN storage business and I think (the EqualLogic acquisition) is an opportunity to grow our overall storage portfolio. Our commitment to EMC remains very strong,” he said.
The acquisition of EqualLogic is expected to close late in the fourth quarter of Dell’s fiscal year 2008 or early in the first quarter of fiscal 2009.