Dell Will Buy Enterprise Storage Provider Compellent

The planned acquisition of Compellent Technologies for $820 million will help Dell move beyond its traditional desktop and notebook market. Compellent's virtualized Fluid Data storage solutions will become part of Dell's data-center portfolio. Dell expects to boost its data-center sales as profit margins fall in the competitive PC market.

Dell is expanding its data-center portfolio with the announcement Monday that it will buy Compellent Technologies, a provider of virtualized storage  solutions. The price is $820 million.Dell said the purchase is the latest in its strategy to offer more enterprise-class storage solutions to "help customers better manage data growth, reduce storage costs, and dramatically simplify the management of IT  infrastructure." 'Fluid Data' Compellent's offerings feature automated data management, such as tiering and thin provisioning, for on-site and cloud -based environments. Other lines in Dell's growing storage portfolio include PowerVault, EqualLogic, and Dell/EMC . Fluid Data is Compellent's name for its approach to automated data storage, which it claims can slash the time and cost of storage up to 80 percent. Compellent, which sells exclusively through channel partners, will maintain its current operations in Eden Prairie, Minn. Dell said it expects to expand Compellent's channel program, including offering other storage options for data centers. Data-center products and services can help Dell grow beyond its traditional desktop and notebook market, which has lower profit margins due to a highly competitive pricing environment. The Round Rock, Texas-based computer giant has projected sales of $30 billion by 2014 for servers, storage and networking for data centers. This would be nearly double Dell's sales to that market in the last fiscal year. Dell's move follows the purchase of Netezza last month by IBM, an agreement by EMC to buy Isilon Systems, and Hewlett-Packard's purchase of 3PAR. The 3PAR deal came after a bidding war between HP and Dell in September. Storage requirements in data centers are booming, with needs changing and increasing because of virtualization and cloud computing, media storage, security  and backup, data-basedbusiness  intelligence, and other growth areas. CommVault, NetApp Next? Some industry observers are suggesting that Compellent's products compete with Dell's own EqualLogic offerings, but Dell said the two companies complement each other. Given the interest in storage-company purchases, CommVault and NetApp are now expected to be on a short list for acquisition by such potential suitors as Cisco Systems or Oracle, in addition to Dell, HP or IBM. Al Hilwa, program director for application  development at industry research firm IDC, said one thing certain for data centers is that "people keep accumulating more and more data." He noted that the "storage market for data centers has been on a growth path for several years now," stimulated by the move to cloud computing and other innovations. When data is stored in the cloud, he pointed out, it's not uncommon that it is stored two or even three times for safety, thus creating additional storage needs. Hilwa noted that such storage also requires solutions that offer automatic provisioning and elasticity of resources. Given the importance of sophisticated storage solutions that can accommodate cloud computing, Hilwa said it was clear Dell was going to find other targets after its "aggressive pursuit of the 3PAR deal fell through."