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Dell's EqualLogic Buy Latest In String Of SMB Deals

It's good to be a small to medium sized business these days if you're looking for more technology solutions. IBM, HP, Sun and Dell are all showing greater interest in SMBs, that had long been the domain of local integrators, helping them replace a back room of wires and white boxes with integrated blade systems and storage.

HP recently introduced a new blade server for the SMBs, the c3000, a.k.a. "Shorty." IBM today launched its counter to Shorty, called Blade Center S, Dell recently introduced an SMB storage solution of its own, the MD3000i and now Dell snapped up EqualLogic.

Dell's $1.4 billion purchase of EqualLogic is yet another step forward for big iron vendors showing some love to SMBs. Of course, it will benefit Dell, too. Mike Arterbury, director of storage operations in the Dell Product Group, said the EqualLogic buy will also help his company's SMB virtualization strategy.

"We have a well-discussed strategy toward IT simplification and expanding the server simplification play," he told InternetNews.com. "It is core and essential to our strategy and this acquisition plays right into the hands of that. EqualLogic is well adept at attaching to virtual environments and is partnered with VMware. So they have done interesting things in that environment."

More important, EqualLogic has an established sales channel, something Dell needs to compliment its direct sales business. "It will augment the way we go to market today. We hope to develop and exploit the channel and hopefully give it more Dell products to move through that channel," Arterbury said.

Analyst Joe Clabby of Clabby Analytics has noticed all the attention SMB's have been getting lately. "Now you have companies like IBM and Dell and HP making a big push into SMB, so suddenly you have all the lights coming on with everyone making a big push into SMB. That tells me that's where the companies think the growth is going to be," he said.

Dell has a long, established partnership with storage giant EMC, but those configurations are best suited for enterprise scale datacenters. EqualLogic's IP-based storage is more flexible in connecting to hypervisors and operating systems and moving with the virtual environments.

EMC's fibre channel storage connections are somewhat change averse, said Arterbury. "Fibre dwells in the physical realm and it's more labor intensive to move data around when you have it coupled to a server environment," he said.

That said, Arterbury hopes it doesn't change the relationship with EMC. Dell plans to make clear lines of delineation for its customers between an EMC offering and a low-end offering, whether it's EqualLogic or its own technology, like the recently introduced MD3000.

Some EqualLogic technology will find its way into the MD storage portfolio, but Arterbury said it's too soon to discuss integration of the technology. EqualLogic will remain in Nashua, N.H., its home base.

Clabby said Dell's systems scale out well but not up, which is why the company is putting so much emphasis on the SMB market. "They're saying how do I grow market share? I gotta do a better job at SMB," he said. "So EqualLogic makes perfect sense for them. They get into the market with [EqualLogic's] distributors. If you're a sales rep, it just gives more stuff in the bag to sell to customers."