EqualLogic Competitors Target Dell's Storage Acquisition

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.

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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.

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Hifn's new Fast Start Advantage program is aimed at making sure solution providers know the company only works with channel partners. It includes multiple levels of partnership, with more benefits including higher margins and, for the first time, market development funds going to solution providers who lead with Hifn's iSCSI, Matze said. Hifn has also hired inside sales people to help solution providers chase leads the company generates.

Getting acquired by publicly-listed Hifn was key to developing the new program, Matze said. "We can do this now that Siafu is part of a publicly-listed company," he said. "Before, we were a bit cash-strained."

FalconStor's Huai said that, rather than targeting EqualLogic solution providers with some new program, he prefers to emphasize the difference between FalconStor and EqualLogic.

For instance, Huai said that FalconStor's technology features enough bandwidth to allow active-passive failover for protecting the data, compared to EqualLogic's active-passive failover. FalconStor also allows end-to-end data replication with compression, encryption, and automatic reconnect and restore if the data link breaks. It also supports native Microsoft Exchange snapshots, and provides physical server to virtual server disaster recovery.

Huai agreed that the EqualLogic solution is priced lower than that of FalconStor. "But you have to look at the solution," he said. "Our price is competitive because we allow solution providers to customize the solution according to customer needs."

In an e-mail response to questions from Channel Web, Brian Bell, vice president of sales at Compellent, said his company talks to potential partners every day and has already received "quite a few" enquiries from solution providers looking at alternatives since the Dell/EqualLogic marriage was unveiled.

"It's really an easy conversation to have," Bell wrote. "Unlike with other vendors, partners know exactly where Compellent stands in every business transaction and customer engagement. Our assisted sales model with protracted registrations, great margin opportunities and our clearly defined product development strategies are strong incentives."

LeftHand Networks' Bangs said his company and EqualLogic share a certain base of solution providers. "More of them are calling us than we are calling them," he said. "While we have some exclusive resellers, several shared resellers have called us to see about moving their business to us."

Bangs said that larger solution providers were more likely to call about switching than smaller solution providers because the larger partners have more internal and external clout and can afford to make sweeping changes without fear of repercussions from the EqualLogic sales force. "Smaller ones are saying they'll wait and see because they are more dependent on leads from EqualLogic," he said.

LeftHand Networks, which coincidentally last week introduced two new iSCSI appliances based on its SAN/iQ management software with thin provisioning, snapshots, clustering, synchronous and asynchronous replication, volume migration, and volume cloning, is not offering any new channel programs specifically to attract EqualLogic solution providers, Bangs said.

Instead, it is leaving that job to its two distributors, Avnet and Alternative Technologies, Bangs said. "They have been going out and aggressively targeting EqualLogic resellers," he said.

LeftHand Networks has two messages for solution providers looking to decide how to deal with Dell's acquisition of EqualLogic, Bangs said. "First, we always have been, and always will be, channel-centric," he said. "Second, our product never was, and never will be, sold by Dell."