Dell's first-ever acquisition fills high-end storage need

AUSTIN, TEXAS - Dell customers soon may be able to attach a storage device of any type or size to any server, following the company's acquisition last week of Convergenet.

Dell's first-ever acquisition will also let the company enter the high-end storage market for a relatively modest investment, analysts say. Dell will acquire Convergenet, a privately held company, in a stock transaction valued at $348 million.

Convergenet was due to roll out hardware and software dubbed "storage domain manager" that would let virtually any host computer connect to any type of storage device without regard to operating system or platform. "Convergenet is on the leading edge of research and development of data class storage for storage-area networking," says Tom Meredith, senior vice president and chief financial officer at Dell.

With the Convergenet software and hardware, it would be possible to connect a Dell PowerEdge server running Windows NT to a high-end Hewlett-Packard XP256 or EMC Symmetrix system. Conversely, Dell PowerVault storage could be connected to Compaq ProLiant servers or any Reduced Instruction Set Computing-based server.

The Convergenet product, which Dell will launch sometime next year, also lets IT professionals dynamically allocate storage in the event of a storage subsystem failure. Data being stored on a Windows NT storage device by a Windows NT server will be automatically directed to alternate storage if the primary storage fails.

Although neither company would comment on specifics, Convergenet's storage domain product, code-named Gemini, will initially be Fibre Channel-based with provisions for blending in legacy SCSI devices, according to Dick Watts, Convergenet's president and CEO. The deal does not preclude future iterations of the hardware connecting directly to Gigabit Ethernet or ATM links, company officials say.

"The acquisition allows Dell to get into a broader Windows NT and Unix market," says Dave Hill, an analyst with Aberdeen Group in Boston. "The company is now a player in the overall enterprise marketplace."

Mike Lambert, senior vice president of the enterprise systems group at Dell, says the company intends to target a wide variety of storage customers eventually but needs to proceed in measured steps.

"We have been very cautious in coaching our sales people not to go head-tohead with EMC and not to overcommit on products," Lambert says. "In time, our products will encompass the total storage needs of the customer, and in the long term, absolutely [we will compete with EMC]. In the short term, absolutely not."