In July, I attended a Dell reception at which analysts and journalists spoke with Michael Dell. When asked about the company's storage strategy, Dell described it as "Selling what my customers want." That strategy is both pragmatic and forward looking.
Dell is a leader in shipped disk storage. According to International Data Corporation's (IDC's) list of top vendors in 1999, when internal (captive disk) and external RAID systems are combined, Dell is sixth on the list, with about $1 billion in sales. Preceding Dell are Compaq ($6 billion), EMC ($4 billion), IBM ($3.5 billion), Hewlett-Packard (HP, $2.5 billion), and Sun ($2 billion). Most of Dell's sales are probably captive disk, a byproduct of the company's strong PC/server sales. Like other vendors, however, Dell is experiencing a drift away from captive disk.
I've since spoken with Bruce Kornfeld, a vice president in Dell's new PowerVault storage division, about Dell's new product offerings, all of which are rebrandings: F5's Big-IP load balancer, Quantum's SnapServer (PowerVault 705N), and Network Appliance's midrange Network Attached Storage (NAS) box PowerVault 720N. Dell also sells the Fibre Channel PowerVault 6xx series, a specially configured Data General CLARiiON system. The list continues to grow. Kornfeld said that his division's mission is to "serve the servers." Almost everything that Dell offers (except enclosure technology) someone else manufactures.
Dell's approach won't bring in the major accounts that require really large storage. However, Dell has positioned itself well. Within a couple of years, storage servers will get cheaper and more common and work themselves into departments and small networks where Dell is king.
In a recent eWeek interview, a reporter asked Michael Dell when Dell was going to be a serious storage system supplier in large accounts. He replied, "When Dell originally enters an area such as servers or storage, \[it won't have\] . . . the high end. . . . \[Dell is\] liable to see the capabilities and \[offer them\] at price/performance that will effectively open up a much larger market space. . . . You'll see Dell doing the same thing for the storage market that we've been doing for the server market, and that we've already done \[in\] the workstation
market and notebooks and desktops."
Dell is making some un-Dell-like moves to position itself in the storage market. The company is investing (through Dell Ventures) in storage companies such as ConvergeNet, the creator of storage domain management technology for enterprise Storage Area Networks (SANs). The company invested in virtualization technology through StorageApps, bringing a SAN appliance—the PowerVault 530F—to market. According to Kornfeld, next on the list of announcements is Dell's intent to make the PowerVault 705N attach to Solaris servers. Not long ago, Michael Dell announced that Microsoft and Dell had signed a joint development agreement to design and build NAS devices (no details were disclosed).
Dell understands the small and midrange networking marketplace. Through thoughtful OEM deals, Dell is strengthening its position by collecting some best-of-breed hardware. Competing against the larger storage vendors requires software to make all the storage work. Dell is unlikely to write this software or to acquire enough interlocking software pieces to tell a complete story to a large account. But Dell is positioned to enter the storage market from the bottom up and leads most of the server vendors in this market (with the possible exception of Compaq).