Dell Set To Close $1.4 Billion EqualLogic Acquisition

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The biggest test yet of Dell's commitment to the channel could come as early as Monday as the vendor is expected by several industry sources to announce it has closed its acquisition of EqualLogic.

Furthermore, a source close to Dell said the vendor is expected to adopt certain parts of EqualLogic's channel program when Dell unveils and launches its enterprise architecture certification program on Monday.

Dell early November said it plans to acquire EqualLogic in a deal worth $1.4 billion. For Dell, EqualLogic is an opportunity to grab one of the top vendors in the red-hot iSCSI market while laying the groundwork for a channel based on EqualLogic's channel-only sales model.

As part of that enterprise architecture certification program, Dell said on Friday it will lower the bar for deal registration by letting deals as low as $50,000 be registered, down from the $75,000 bar it had previously announced.

One solution provider, who asked to remain anonymous, said that lower figure is still not enough for EqualLogic partners who are used to being able to register a deal with no minimum dollar value.

EqualLogic spokespeople referred specific questions about the closing of the acquisition and parts of the channel program to Dell. A Dell source merely said that many issues related to the channel program will be addressed Monday.

Solution providers are nearly unanimous in their belief that how Dell deals with its EqualLogic acquisition is key to its success as a channel player.

Aside from those solution providers who have already signed up as Dell VARs who look forward to EqualLogic being a part of the Dell offering, and those who want nothing to do with Dell, the majority of channel partners are for now in a wait-and-see mode, and could swing either way, depending on how the acquisition works.

Dave Hiechel, president and CEO of Eagle Software, a Salina, Kansas-based EqualLogic solution provider, said it's business as usual for now, but he is keeping his options open. "Nothing has raised any red flags yet," Hiechel said.

Ever since the acquisition was announced, Eagle Software has been working with the same core people at EqualLogic, Hiechel said. "So there've been no big changes," he said. "There's a deal registration program in place, and Dell reps get channel-neutral compensation."

Eagle Software is planning about 26 end-user marketing events in 2008 including seminars and lunches, and EqualLogic along with CommVault Systems, Oceanport, N.J., and Spectra Logic, Boulder, Colo., will be core products at those events, Hiechel said.

"We'll let Dell trip themselves up before we make any changes [in our relationship]," he said. "The powers-that-be at EqualLogic have put in procedures to make this work."

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