Dell Dives Deeper

Michael Dell is making waves in the channel again, this time with the planned acquisition of storage vendor EqualLogic.

To the rest of the world, Dell's plan to buy a small storage vendor was interesting on a few fronts. But the channel has this one under the microscope.

Dell plans to pay some $1.5 billion for EqualLogic. That's a pretty hefty sum for a company with $68 million in revenue that has never turned a profit.

LARRY HOOPER Can be reached via e-mail at lrhooper@cmp.com.

And then there is the EMC angle. Dell resells EMC storage hardware, to the tune of about 15 percent of EMC's total revenue. So what does the acquisition mean for EMC? Michael Dell says the company's relationship will not change. But I'd bet there are a few folks in Hopkinton, Mass., who are just a bit nervous when they think about how much of their business is tied to Dell.

The channel angle of the story is the most intriguing, however.

Michael Dell told our own Ed Moltzen that he sees EqualLogic as a catalyst for Dell's channel plans. And Dell reiterated that a Dell channel program will be coming soon. Indeed, EqualLogic is an all-channel company with about 500 partners, so there is something Dell could learn from EqualLogic. And EqualLogic's partners could get Dell going in the right direction.

But that is a big if.

Several solution providers already dealing with EqualLogic were not particularly keen on dealing with Dell. While many of them did say they would move into "wait-and-see" mode before abandoning the product line, a few said they would move away from EqualLogic as fast as possible. And it makes sense. If a solution provider is out there building a business around alternative providers, Dell doesn't exactly qualify.

Still, the plan to use EqualLogic as a catalyst to build a channel has me confused. Dell for months has been promising to go after the channel in a major way with a full-fledged channel program designed to help VARs build a profitable business selling Dell hardware.

Am I the only one who assumed that hardware would be desktop systems, notebooks, printers and servers? Stay tuned.

What do you think dell's plans are concerning equallogic?
E-mail me at lrhooper@cmp.com.