Storage Management Strategies for the CIO
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Don't be alarmed by all the recent industry news; it's a good time for storage consumers.
Another storage highlight in 2007 was Dell buying EqualLogic. This was more than just a big player acquiring an emerging storage vendor. Dell threw down a gauntlet when it bought EqualLogic, essentially saying "We'll own IP; we'll change our strategy; we'll be bold." This acquisition eliminates risk for some, but creates it for others. There may be a number of EqualLogic customers that don't want to buy from Dell because they standardized on Hewlett-Packard (HP) or IBM. There are some EqualLogic channel partners that may be groaning because they've spent years competing against Dell. Other customers may simply be concerned that EqualLogic will become lost within the giant Dell. On the other hand, Dell has the brand, resources and reach |
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| to take EqualLogic faster and further than if the smaller company was left alone. Dell shouldn't only respond to markets but create them--and with EqualLogic, Dell is paving the way for the evolving small- to medium-sized storage market.
Dell's purchase of EqualLogic has other ramifications for the industry. First, it further elevates iSCSI as a viable alternative to Fibre Channel (FC). Is FC dead? Not at all, but don't be surprised to see iSCSI surpass FC as the dominant SAN interconnect over the next few years. Second, the Dell supply chain can probably increase EqualLogic's 65% gross margins by another five to 10 points. This gives Dell powerful economic leverage and puts more stress on the competition, which could affect the entire storage landscape.
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This was first published in January 2008
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