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Dell: No. 1 In Storage Capacity Shipped Despite Falling Storage Revenue

For Dell, bragging rights in the storage business adds to the enterprise profile the company is trying to build as part of its ongoing bid to become private.

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Dell is bragging that it in the first quarter it became the largest storage vendor in terms of terabytes shipped.

This achievement, noted in a blog post by Dell storage executive Travis Vigil, comes despite the fact that Dell's overall storage revenue has declined for the past few quarters and despite the intense competition from pure-play storage vendors and from systems vendors that include storage in their servers.

For Dell, bragging rights in the storage business adds to the enterprise profile the company is trying to build as part of its ongoing bid to become a private company. That move is being driven as a way for Dell to reorganize as a provider of enterprise solutions away from the glare of the Wall Street investment community.

[Related: Dell Execs Behind The Scenes: We Can't Flip-Flop On Strategy ]

The storage coup follows Dell's closing in on Hewlett-Packard as the top server vendor in terms of numbers of servers shipped.

Vigil, an executive director at Dell responsible for Dell's storage business, wrote in a recent blog post that his company was the "[No.] 1 supplier of enterprise storage systems capacity (internal and external combined) in Q113," based on IDC's first-quarter 2013 Worldwide Quarterly Disk Storage Systems Tracker.

That same IDC Tracker also listed Dell as the largest shipper of enterprise direct-attach storage (DAS) technology for the quarter, Vigil wrote.

"This latest ranking demonstrates Dell's ability to successfully offer customers both traditional external arrays and, as storage continues to move closer to the compute node, internal storage from our server business. This is becoming increasingly important as technology advances and the IT industry evolves into one that appreciates a solutions approach to data center needs," he wrote.

It's a pretty amazing revelation, said Paul Clifford, president of Davenport Group, a St. Paul-based solution provider and longtime Dell storage partner.

"The acceptance of Dell storage from our customers has been phenomenal," Clifford said. "We just had a significant win with a large customer in the central U.S. They were looking at HP and Cisco blades, and we were there talking to them about backups. But after talking to them, they realized the value of a Dell solution, including Dell server, networking and storage working together."

NEXT: Dell Storage Revenue Vs. Capacity Trends


While Dell reported its total enterprise solutions business revenue in the second quarter of 2013 rose 8 percent over the same period last year, its enterprise storage revenue actually fell 7 percent.

That followed a 10 percent year-over-year drop in storage revenue in the first quarter, Dell reported.

However, IDC in June reported Dell's first-quarter 2013 storage revenue rose 16.7 percent to give it third place overall in revenue terms after EMC and HP.

Bob Fine, director of product management for Dell storage, said that Dell's move to the top of the storage industry in terms of storage capacity stems from a couple of factors.

Citing IDC reports, Fine said that Dell is the top supplier of external DAS capacity and, due to its strong server business, is the top supplier of internal-attached storage.

Dell is also the No. 3 or No. 4 supplier of external-attached storage, depending on how the list is looked at, Fine said. Its total external storage capacity shipped ranks only below EMC and NetApp in terms of large named vendors, although the "other" category, consisting of the total capacity shipped by smaller firms outside the top named vendors, is also ahead of Dell's capacity shipped.

"This is the first time Dell has been No. 1 since we have been tracking it," Fine said. "That speaks to the success we've had, not only in our new product introductions, but in our storage intellectual property."

Fine pointed to Dell's 2011 closing of its acquisition of storage vendor Compellent as an example of how far the company has come in developing its enterprise storage business.

"Since Compellent joined Dell about two and a half years ago, we've seen that business almost quadruple the average configuration size and number of customers," he said.

Fine explained Dell's growth in storage capacity in the face of its reported drop in storage revenue as a combination of factors, including an overall industrywide drop in storage revenue combined with an increase in customer demand for storage capacity not related to new storage system sales.

NEXT: Fine, Clifford Say Compellent's Upgrades Makes A Difference


Dell, in a survey it did with IDC, found that Compellent storage systems have an average productive life span of 6.9 years, compared with 3.5 years for other storage systems, Fine said. That is due to the fact that Compellent was designed to be upgraded with new technology rather than replaced as new technology becomes available, which means customers are adding capacity over several years to existing storage systems.

"Customers are staying with their Compellent solutions longer, and adding more capacity to existing systems," he said. "It's easier for customers to add capacity to existing systems than to buy new systems. It shows up in these kind of reports as increased overall capacity."

Fine is not kidding when he talks about how capacity upgrades to Dell's Compellent storage systems can have a big impact on its overall storage capacity shipped, Davenport's Clifford said.

"In the last two years, our biggest business has been Dell storage add-ons, including selling extra hardware without new license costs," he said. "We have a number of customers who have had their Compellent systems for seven, eight and nine years. We're not selling them new licenses. Just new hardware."

PUBLISHED AUG. 20, 2013

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