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EqualLogic Competitors Target Dell's Storage Acquisition

By Joseph F. Kovar
November 12, 2007    11:49 AM ET

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Dell's pending acquisition of iSCSI developer EqualLogic has the latter's competitors circling around the channel looking for an opportunity to swoop in and grab EqualLogic solution providers who may not want to deal with Dell in the future.

Dell last week 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 fast-growing iSCSI market while laying the groundwork for a storage channel based on EqualLogic's channel-only sales model.

EqualLogic competitors, most of whom like the vendor have channel-only sales models, are seeing a big opportunity to steal EqualLogic solution providers and thereby strengthen their channel while weakening one of the two main pillars of the Dell acquisition.

The four competitors of EqualLogic most often mentioned by solution providers include Hifn, a Los Gatos, Calif.-based developer of low-cost iSCSI appliances with built-in encryption; FalconStor Software, a Melville, N.Y.-based developer of virtual tape libraries and software for virtualizing storage; LeftHand Networks, a Boulder, Colo.-based developer of software to turn industry-standard servers into iSCSI servers; and Compellent Technologies, an Eden Prairie, Minn.-based developer of virtualized Fibre Channel storage products which nonetheless competes with the iSCSI vendors.

Greg Knieriemen, vice president of marketing at Chi, a Cleveland, Ohio-based solution provider who works with EqualLogic and its four key competitors, said that all four have the potential to be the channel winner if solution providers do not take Dell at its word to keep the EqualLogic channel intact.

"But I can't see any one partner having an advantage over the others," Knieriemen said.

The four vendors, most of whom refused to acknowledge that they have changed their channel marketing to take advantage of Dell's EqualLogic acquisition, nevertheless are aggressively targeting EqualLogic solution providers.

However, they are not shy about how happy they are that Dell is acquiring EqualLogic.

The acquisition is a great boost for iSCSI and the channel, said John Matze, vice president of business development at Hifn. "Dell is going to push this all over the channel," Matze said.

David Bangs, vice president of sales at LeftHand Networks, said the acquisition helps show the value of the iSCSI storage market.

"It's a great validation of our space," Bangs said. "And it's a great valuation of our space."

ReiJane Huai, chairman and CEO of FalconStor, said his company is "certainly encouraged" by Dell's commitment to iSCSI. "We don't need to target EqualLogic resellers specifically," Huai said. "They may want to stay with EqualLogic and Dell. But they are welcome to come to us."

Hifn is not coy about its plans to reach out specifically to EqualLogic solution providers who don't trust Dell to develop a strong channel, Matze said.

"VARs with a wait and see attitude to the acquisition, we see them saying, yeah, we're not going to wait," he said. "They've been down the road with Dell before."

Hifn this week is targeting iSCSI solution providers, especially EqualLogic partners, with the company's first formal channel program since its acquisition in July of Matze's previous company, Siafu Software.

Next: Hifn Touts Fast Start Advantage Program

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