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Dell and EMC sign major storage deal 
Monday, October 22 2001
by Andrew McLindon


Dell and EMC have signed a "multi-billion dollar" strategic alliance that will
see the companies co-brand EMC's line of enterprise storage systems.

Under the five-year deal, Dell will become the primary reseller of EMC's CLARiiON
product line and it will be Dell's standard offering for storage area networks
(SAN) and high-end network-attached storage (NAS) installations. According to
both companies, which between them employ over 6,500 people in Ireland, the
agreement will accelerate the growth of each of their storage systems businesses
in a market that they expect to be worth USD100 billion by 2005. 

 

Dell said the alliance would enable it to now offer storage products that have
additional enterprise-class features, including support for Unix operating
systems. EMC commented that the relationship builds on its strategy to work with
partners to significantly increase its market presence in the rapidly growing
Windows NT and Windows 2000 storage markets.





The two companies have also agreed to work together to explore the possibilities
of developing open, networked storage systems. In addition, Dell and EMC said
they would look for opportunities to use Dell's procurement and manufacturing
capabilities in the production of EMC CLARiiON products.





The deal is expected to give EMC somewhat of an edge in its ongoing battle with
IBM and Hitachi Data Systems for control of the data-storage market.  While the
agreement is set to lower EMC's sales costs, it will also give Dell a mid-range
storage device, which the company has yet to develop on its own accord. 



Despite the apparent good news, investors responded with mixed attitudes toward
the deal. Following the release of the pact, Dell sank around a half of one
percent to USD23.92 at around 11:15 am in New York. Meanwhile EMC climbed over
3.5 percent to USD11.93 at around 11:15 in New York. 



Although some of Dell's fall on the markets could be explained by new figures
from IDC on Monday which said the worldwide PC market further deteriorated in the
third quarter of 2001 with shipments declining by 13.7 percent over the same
quarter a year ago and by 0.8 percent sequentially. 



"We expect Dell's direct sales model will increase EMC's reach and capability
to better service enterprise-class CLARiiON customers, including a much broader
set of small and medium-sized businesses," said Joseph Tucci, EMC president and
chief executive officer. "The midrange information storage market alone last
year was about a USD15 billion opportunity, and we were barely scratching the
surface." 



Kevin Rollins, Dell president and chief operating officer said the agreement
would effectively double Dell's market opportunity in the data storage business.




The companies confirmed that Dell will continue to offer its PowerVault direct
and network-attached storage systems and EMC will continue to offer its Symmetrix
and CLARiiON family of enterprise storage systems and software, directly and
through partners, to customers worldwide. Dell plans to begin offering the EMC
products, which include the FC4500, FC5300, FC4700 and IP4700, to customers in
November.





Dell is one of the world's largest computer systems companies and employs over
5,000 people in Ireland. EMC is a major player in the networked information
storage systems sector and employs 1,600 people in its facility in Cork. 

 

Dell can be found at http://www.dell.com and
EMC can be found at http://www.emc.com.