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Dell poised to buy EqualLogic
By Kevin Allison in San Francisco
Published: November 5 2007 19:22 | Last updated: November 5 2007 21:16
Dell, the world’s second biggest personal computer maker, on Monday moved to wean itself further from its reliance on direct sales by announcing a $1.4bn deal to buy EqualLogic, a company specialising in storage virtualisation.
The agreed deal would be the biggest acquisition in Dell’s 23-year history if approved by shareholders.
In addition to EqualLogic’s virtualisation technology, which greatly increases the efficiency of data storage, the deal will give Dell access to EqualLogic’s relationships with more than 500 “channel partners†– the third-party companies that design and install computer systems for hospitals, banks and other corporate clients.
“We are going to use EqualLogic as a channel brand and continue to strengthen the channel programmes they have in place,†said Michael Dell, Dell’s founder and chief executive, in an interview with the Financial Times. He added that Dell planned to roll out its own enhanced channel partner programme within the next few months.
“There are going to be many, many more ways and places and partners with whom customers can get access to Dell’s technology,†Mr Dell said.
While many computer makers have long relied on channel partners for a big chunk of their sales, Dell has traditionally shunned such relationships in favour of a direct sales model. An over-reliance on the direct model was among the factors that led Dell to stumble in 2005 and 2006 amid price competition and changes in customers’ purchasing habits.
Since he replaced Kevin Rollins as Dell’s chief executive this year, Mr Dell has announced a series of moves to make Dell less dependent on its traditional model.
Over the past several months, Dell has announced that it will begin selling its computers in retail stores in the US, UK, China and Japan. It has also launched a new array of computers designed to cater to small business customers.
While storage is among Dell’s fastest-growing businesses, it accounted for just $613m of Dell’s $14.8bn in revenues for the quarter ended in August.
EqualLogic, which had been planning to float its shares this year, made $44.8m in revenues last year. The group launched in 2001 but has not posted a profit.
By Kevin Allison in San Francisco
Published: November 5 2007 19:22 | Last updated: November 5 2007 21:16
Dell, the world’s second biggest personal computer maker, on Monday moved to wean itself further from its reliance on direct sales by announcing a $1.4bn deal to buy EqualLogic, a company specialising in storage virtualisation.
The agreed deal would be the biggest acquisition in Dell’s 23-year history if approved by shareholders.
In addition to EqualLogic’s virtualisation technology, which greatly increases the efficiency of data storage, the deal will give Dell access to EqualLogic’s relationships with more than 500 “channel partners†– the third-party companies that design and install computer systems for hospitals, banks and other corporate clients.
“We are going to use EqualLogic as a channel brand and continue to strengthen the channel programmes they have in place,†said Michael Dell, Dell’s founder and chief executive, in an interview with the Financial Times. He added that Dell planned to roll out its own enhanced channel partner programme within the next few months.
“There are going to be many, many more ways and places and partners with whom customers can get access to Dell’s technology,†Mr Dell said.
While many computer makers have long relied on channel partners for a big chunk of their sales, Dell has traditionally shunned such relationships in favour of a direct sales model. An over-reliance on the direct model was among the factors that led Dell to stumble in 2005 and 2006 amid price competition and changes in customers’ purchasing habits.
Since he replaced Kevin Rollins as Dell’s chief executive this year, Mr Dell has announced a series of moves to make Dell less dependent on its traditional model.
Over the past several months, Dell has announced that it will begin selling its computers in retail stores in the US, UK, China and Japan. It has also launched a new array of computers designed to cater to small business customers.
While storage is among Dell’s fastest-growing businesses, it accounted for just $613m of Dell’s $14.8bn in revenues for the quarter ended in August.
EqualLogic, which had been planning to float its shares this year, made $44.8m in revenues last year. The group launched in 2001 but has not posted a profit.
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