EMC, Services And Direct Sales Make Dell A Strong Competitor

For 2003, Dell will continue to push networked storage regardless of whether it is connected via SAN or NAS, a move accelerated by last year's introduction of a NAS gateway to SAN connectivity, said Russ Holt, vice president and general manager of Dell's Storage Group.

New technologies the company is evaluating includes Serial ATA hard-drive technology. "We think this will open the market to new storage products," Holt said. "Maybe Serial ATA doesn't have the same performance as higher-end drives, but it provides robust storage at a lower price point."

Dell this year also plans to implement iSCSI storage and expects to introduce near line storage devices for the first time, said Holt.

The company also will continue to push the Clariion CX family of arrays it resells from EMC and will start to manufacture the entry-level CX200 this quarter, Holt said. Dell may manufacture EMC's CX400 and CX600 as well. "We will evaluate [manufacturing these two] at a time frame when both Dell and EMC deem if and when necessary," he said.

Dell derives product strength from reselling EMC's Clariion line of storage arrays, a relationship which has become one of the storage market's strongest, said Holt.

Dell's sales of EMC Fibre Channel SAN products during the first three quarters of 2002 jumped 150 percent over the same period in 2001, Holt said. Year-to-year growth in the second and third quarters of last year hit 70 percent. As a result, Dell added more than 1,500 new accounts to its storage customer base during those three quarters, including a mix of new customers and previous Dell PC and server clients, he said.

"EMC has become a very strategic partner of ours," said Holt. "We want to double the size of our company in the next five to seven years, and storage is a critical part of that plan."

The EMC product line has also helped Dell move up into the enterprise Windows environment, which in turn has spurred the company's server business there as well, Holt said. For example, he said the State University of New York recently purchased a Dell SAN with a capacity of 16 Tbytes connected to high-end Dell servers.

A reseller relationship with EMC and continued focus on the direct model have taken Dell Computer into the top ranks of storage vendors and are expected to help the company continue to boost its business in this market, said Holt. The company's external disk storage business hit $673 million in 2002, up more than 67 percent compared with 2001, according to IDC.

"Our primary focus is our direct relationship with customers," he said. "In our relationship business, our primary focus is working through our account teams. We have a mechanism to provide products direct to the channel, or via phone or the Internet. But nothing programmatically is done. . . . Dell wants to maintain the direct contact from a product basis."

On the services side, nearly 100 percent of that business goes through Dell-badged people, said Holt.

Dell may consider partnering with service providers who go through the company's training, but the implementation services themselves will remain in the hands of Dell employees, he said.

Dell recently mandated that a certain level of services be sold with its storage products. Every Dell SAN sold must include either gold-level or platinum-level services, Holt said. Gold-level includes 24-hour engineer-to-engineer support, an assigned technical account manager, same-day 7x24 on-site response, customer-defined call priority, and seamless support for certain third-party vendors. Platinum-level support also includes monthly billing options and a menu of options that allow custom-designed support programs.