Dell's new SAN/NAS device makes them a serious storage contender

Dell Computer Corp. announced a pair of storage devices that marks the company's entry into SAN/NAS market. The products include devices for small businesses or workgroups at very competitive prices. While Dell has been dabbling in the market for sometime, these devices are the company's first dedicated SAN/NAS storage products. But, can the Round Rock, Texas company seriously compete in a storage market dominated by the likes of EMC, Sun, and Compaq? Or, are they just another major computer maker who wants to get a share of the storage pie before it's all gone?

"Dell is already competing," said John McArthur, vice president, Storage Research, for International Data Corp. (IDC), Framingham, Mass. "They're selling a lot of storage attached to their server platform. The new NAS appliance will help them to start selling storage off of their platform for small workgroups and desktops. There are a lot of uses for that kind of storage."

The NAS device, the PowerVault 705N plugs into any network environment, providing four disk drives with a total capacity of 120G Bytes of storage. This device installs in less than 15 minutes, and is priced starting under $3,000.

"I think that they can move some products. If I was a competitor with Dell coming into my space, I'd be worried. They're aggressive," said McArthur.

The new NAS and SAN appliances aren't going to run Compaq or EMC out of the market, they aren't on the same level with the higher-end offerings from other companies, said McArthur. Dell is taking more of a piece-meal approach. "Despite the bravado, Dell's not going head-to-head with Sun," he said. They're not going head-to-head against EMC. It's going to be a long time before they do, if ever. What they do well is they go head-to-head against portions of HP, IBM, and Compaq."

According to IDC, the NAS market will experience a compound annual growth rate of 66%, growing from $850 million in 1999 to $6.57 billion by 2003.

"We are committed to offering customers at every level a comprehensive suite of storage solutions that address their data requirements," said Michael Lambert, senior vice president, Dell Enterprise Systems Group.

The SAN offering, the Dell PowerVault 530F, can create exact copies in local and remote locations through its remote mirroring feature. The PowerVault 530F solution, in many cases, sells at one-quarter to one-half the price of comparable systems with similar capabilities. The 530F SAN appliance is available for under $50,000.

McArthur said that Dell's SAN appliance represents a whole new area. "There's not a lot of precedent there. It will allow them to compete in areas like remote copy [versus Compaq]. There's enough opportunity for them, they just have to start providing some of the function like they're starting to do with the SAN appliance. They're always going to play the price card. They have the ability to undercut competitors prices," he added.

The PowerVault 530F leverages software technology from StorageApps, a Bridgewater, N.J. headquartered provider of SAN applications and appliances, and enterprise server technology from Dell. According to the most recent quarterly research from IDC, Dell is the No. 2 provider of Standard Intel Architecture Servers worldwide--in terms of unit shipments.

William Hurley, program manager for the Boston, Mass-based analyst firm, the Yankee Group, said that Dell's OEM'ing StorageApps SAN and NAS solutions represents the parting of ways between Dell and Network Appliance, Inc.

"StorageApps is a good second-tier company in the SAN/NAS market but it doesn't lead in either of those markets. The move to StorageApps was pre-empted by Dell's $25 million investment in mid-July." Hurley expects that the turn from a market leader to a second-tier vendor will cause a degree of concern among Dell's storage customers while Dell server customers should not be affected. "Storage and server purchasing decisions are no longer wedded, due to the advent of SAN and NAS solutions," he said.

Let us know what you think about this story, e-mail Kevin Komiega, assistant news editor

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