Dell-EMC Relationship "On The Rocks" After Storage Acquisition

Jeff Ready, CEO of Scale Computing, took a shot.  “It could be an indication that the Dell-EMC relationship has become furthermore strained,” he explained.  During Dell sells storage products through EMC, its attempt to acquire 3Par was an initial demonstration that it might be looking to take storage into its own hands.  “EMC [executives] feel that there isn’t a way to actually bring back the relationship with Dell as it’s showing they want to take part of storage themselves,” explained Ready.

The fastest growing areas in the IT world

Storage is one of the fastest growing areas in the IT world, prompting major players to gobble up whatever they can to position themselves correctly.  Hewlett-Packard snatched 3Par from Dell previously this year, as Dell’s “weird way of valuing companies” allowed HP to overbid and take the storage providers.  EMC acquired Isilon, which Ready feels has some of the best innovation, for $2.3 billion in mid-November.  And nevertheless Dell all things considered got pushed the door open, afterwards having put its foot in with its acquisition of Equallogic.

“It’s a wise move by Dell,” said Ready, “if they think the short and long term future of computing will be in storage.”  The acquisition, he explained, was in large multiples, however is worth it as “these guys can’t make money selling servers” anymore.  Ready explained that Dell, with its attempted purchase of 3Par and final purchase of Compellent, shows that its “acquisition appetite” is geared towards block storage.  The trend, although, seems to be shifting towards unified or scale out storage, just as EMC’s Ision of Ready’s own Scale Computing.

Natural complement to cloud computing

Virtualization is a natural complement to cloud computing, which builds on the premise of “out-sourcing” data storage.  With data stored outside the company’s main servers, these can act more efficiently and with the addition of “virtual machines,” a crash in one server won’t cripple the whole system.

Ready reminds investors that cloud computing is after all small.  “Judging by the type of clients Compellent has, I don’t think Dell acquired them to provide its customers with cloud storage,” explained Ready.  The faster growth, he noted, is in the unified, scale-out segment.  So keep your eyes peeled.