Folks are predicting that Dell will acquire a storage company to boost their growth. There seems to be several good indications that this is true:
clue #1. Dell recently hired IBM's merger and acquisitions executive
clue #2. The Equalogic acquisition went well (Dell made a significant jump in the iSCSI market)
clue #3. Dell has almost $10B in cash
clue #4. In a recent Dell analyst call (July 09), Michael Dell said that the enterprise business is a high-margin area where the company could seek acquisitions".
Sounds like Dell is going to harvest a storage, software, or hosting company. Check out the current predictions.
Here are the predictions:
3PAR Disk Arrays(Taneja Group) - "3PAR's InServ Storage Server systems compete with EMC Corp.'s Symmetrix, as well as with systems at the high end of the Clariion platform, which Dell resells"
My prediction - not likely at all... EMC is well-known for storage and trusted by a large number of customers for decades.. Dell walking in the door with a re-badged 3PAR won't sway many customers. 3Par might end Dell's partnership with EMC and thus cause EMC to go on the offensive. If the partnership stayed in place, a Dell badged 3PAR array would cause an array positioning nightmare for the Dell's marketing and sales force.
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CommVault Systems Inc, Storage Software (Taneja Group/ESG) - CommVault has the profitability, high margins and recurring revenue streams that Dell wants." "CommVault also brings materiality from a revenue standpoint, and is profitable."
My prediction - possibly but unlikely... I think it is inherently hard for hardware companies to sell software well. I've seen this type of mismatched sales culture clash with other pure hardware companies buying software companies. The typical hardware company's sales force has a hard time grasping something that they can't see, touch, or inventory. If an acquisition happened, CommVault sales would potentially suffer at the hands of the "hardware guys" using discounted software to sell hardware (or even worse - run them as a separate company and ignore them completely).
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Compellent Technologies Inc. disk arrays (ESG/Taneja) - If Dell buys Compellent it would signify serious problems with the Dell-EMC Corp. relationship. Compellent's Storage Center midrange systems are direct competitors with the Clariion.
My prediction - ppbbbttt! same argument as 3Par (above)
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DataDirect Networks - Privately owned DataDirect Networks would let Dell scale up further into the enterprise. DataDirect's disk arrays are self-healing (huh?) and it recently added a scale-out cloud storage system called the Web Object Scaler (WOS).
My prediction - I have no idea but I'll say no.. I don't think Dell needs ANOTHER disk array.
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GlassHouse Technologies Inc. -Dell is a partner with and an investor in privately held storage services and consulting firm
My prediction - NO.. keep paying them as a consultant
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Isilon Systems Inc., NAS storage - unstructured data will account for most enterprise data growth going forward. Most major vendors are looking to add scale-out network-attached storage (NAS) systems to their portfolios to accommodate this trend. Isilon would have that product and compete against EMC
My prediction - not likely; again another disk array with the same challenges - awakening the wrath of EMC and/or positioning nightmare with too many products
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NetApp, NAS storage - biggest name in NAS; loser in the Data Domain bidding war
My prediction - somewhat likely but not probable.. it would give Dell some instant credibility in NAS and might work but it would be a hefty price for yet another hardware vendor with vendor-specific software.
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Symantec Software - analysts predict this as another long shot because of its size, but there has been speculation that Symantec's storage and security software portfolios could help Dell on two fronts
My prediction - unlikely to maybe. similar to CommVault.. it is a silicon valley culture with good software but getting acquired by a low-cost Texan hardware company would be a culture clash just behind Compaq and Digital. Symantec has good products - consumer (Norton virus) and corporate (Veritas backup & file manager suite).
(http://bit.ly/pka54 - Searchstorage.com - original article)
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Palm (Computerworld)- a smartphone consumer company to expand its presence in the mobile market. Palm would provide smartphones to Dell's portfolio of products
My prediction - possible but if you aren't buying Apple then I think you will always be second or worst in smartphones (look at Sprint, Verizon, etc). Now, Steve Jobs is a time-teller and not a clock-builder so in the future if Jobs were no longer the CEO, Apple would be a good target.
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Acer (Computerworld) - PC maker and competitor that has made some significant market moves in the PC market
My prediction - No. Overlapping products with low-margins. Dell already uses the PC as a loss-leader for other products. They don't need to beef up their loss-leader product line. Sure it gives Dell #1 marketshare but long term profitability is more important.
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Drum-roll! Please
Rich Bruklis' Acquisition Predictions
Rackspace Hosting (hosting and cloud computer vendor) - a meteoric rise to $531M revenue in 2008 with 60%+ of gross margin. An independent leader in hosting and cloud computing. Current partnership with Microsoft. Dell could boost sales of their products inside Rackspace data centers while Rackspace continued with their innovative services for customers; both Dell & Rackspace sales' models are direct... both companies are in Texas (Southwest Airlines might double-up their flights between San Antonio and Austin), both companies are fairly nimble when servicing customers. Dell would teach Rackspace about controlling SG&A. If Vegas had a betting line, I'd throw $100 on Rackspace.
Now EMC could still come into play with their Atmos cloud and partnership with AT&T. A Dell/Rackspace-EMC/AT&T partnership could twart IBM, HP (if they ever do anything cloud-based) Microsoft, and Google. But even if that wasn't in the works, EMC would most likely leverage Dell for their server needs.
A group of startups - Zuora (an online billing and metering vendor), Sonian (archiving and compliance cloud software), Rightscale (management platform), Eucalyptus Systems, AppZero (Application Virtualization), etc (http://virtualization.sys-con.com/node/770174 -virtualization journal of top 150 cloud vendors)
EMC itself - the Dell partnership is already in place (albeit two dogs circling the same bone at times); it would give Dell everything that the other predictions are promising; an acquisition sticks it to IBM and HP who are looking up at EMC in the storage market. It also allows the EMC sales force to become the 'one stop shop' that they always sell against when IBM and HP are in the deal. The price would be steep but HP gobbled up Compaq so anything is possible.
The Catholic Church--- Sorry! Apparently Microsoft has dibs on them (the internet's first hoax '94)
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