Dell Wraps Up Compellent, Refocuses Their Storage Ambitions On The Midrange

This week saw one of the last remaining independent storage vendors (Compellent) get swallowed by one of the IT infrastructure mega-vendors (Dell) in an ongoing drive for comprehensive solution sets.  We’ve seen a great deal of industry consolidation in storage, as vendors want to offer broad solution sets to buyers that want a single throat to choke, more financial stability than little guys can offer, and better integration of solutions. 

In the best of breed world, standing up an application environment generally meant figuring out how to make products from 5 to 10 different vendors work together; doing integration testing on the customer's floor as if such a solution had never been attempted before.  The integrated mega-vendor approach aims to smooth out the connections between server, storage, OS, virtualization, SAN, LAN, NIC, HBA, facilities, and the process and professional services aspects that go into a successful IT environment.  In the end, all this integration by pure infrastructure players may not be able to compete with the application vendors who are increasingly moving towards proprietary hardware stacks built around their apps (Oracle/Sun) or advanced control of infrastructure solutions from partners that are designed to closely integrate with the apps (VMware, Microsoft).  In the end, the app vendors have a theoretical advantage as they own the stickiest piece of the IT puzzle and therefore have closer access to the context of application data that can be used to make decisions about tiering, archiving and data classifications that infrastructure vendors of all stripes have struggled with.  In practice though, the infrastructure vendors have a huge lead in terms of user relationships for hardware purchasing, and more mature capabilities for performance, data protection and integrated management tools.

For this deal specifically, Dell is following up on their loss of 3PAR to HP in heated bidding that saw both vendors bid beyond $2BB.  As a straight replacement for 3PAR, Compellent doesn’t make a ton of sense as they are not a proven solution in the true top tier.  3PAR went head to head with EMC Symmetrix, HDS USP/VSP and IBM DS8000, but Compellent is squarely in the midrange of the market, competing with EMC Clariion, NetApp FAS, IBM DS5000, HDS AMS, HP EVA and others.  However, the midrange of the market is growing faster than the top tier, as cheaper architectures can handle more high performance, high availability workloads with richer software feature sets and more ease of use.  It’s not easy for any vendor to break into the top tier of storage, and requires advanced solution selling, tolerance for long competitive deals and high cost of selling to notoriously conservative top tier storage buyers.

Compellent, with industry leading automated tiering, snapshots and thin provisioning, provides a high level of hardware efficiency in an extremely easy to deploy and use package.  These benefits fit better with Dell’s go to market strengths than 3PAR, which is designed for higher performance, but is also harder to use and much harder to sell.  Dell is trying to break into the complex world of enterprise storage, and doing so gradually and from the bottom (SMB, covered well by their EqualLogic acquisition) to the middle (SME, Compellent's strength today) to the top eventually (Compellent with further roadmap investment made possible by Dell’s deep pockets) makes better sense than trying to rush into the top tier and running the unfamiliar top tier storage gauntlet from day one.