Dell pushes EMC deep into SME sector

When a respected business publication recently referred to Kevin Rollins as storage giant EMC’s chief operating officer, it was a bad error, yet an understandable one. Rollins is in fact Dell’s COO – indeed, he will shortly become its CEO, after company founder and chairman Michael Dell relinquishes that particular role. But what is true is that Rollins has been working extremely closely with EMC of late. He might not be its COO, but Rollins’s influence on EMC has grown substantially.

Since 2001, Dell and EMC have been strengthening a relationship that is yielding promising results at the lower end of the storage market. Initially, Dell simply re-badged EMC’s cheaper products, but over time the partnership has become more collaborative. Last month, the two companies’ most senior executives – Rollins and Joe Tucci, CEO of EMC – chose the opulent surroundings of London’s Lanesborough Hotel for the global unveiling of the AX100, formerly codenamed ‘Piranha’. It is, they modestly claimed, by far the cheapest bundle of storage area network (SAN) technologies available on the market.

Thousands of Piranhas, if you believe the marketing material, are poised to devour the SME storage market. The new product consists of a storage array designed by EMC and manufactured by Dell, plus up to a dozen disk drives, EMC’s Legato management software, a Brocade switch, Qlogic host bus adaptor storage drivers and a wizard-based installation and management tool. The AX100 supports Windows, Linux and NetWare operating systems, although support for Unix will come later.

It is the starting price of the AX100 that has set the analyst community buzzing: just £5,899 (or EU8,499 in the rest of Europe and $9,999 in the US) for the full SAN configuration. At the same time, a direct-attached version, which comes minus the Brocade switch and some SAN software features, costs only £3,499 (or EU4,999).

Tucci says the AX100 is the first networked storage product set below the $10,000 figure, a level more normally associated with conventional direct-attached systems. (He is presumably correct, although Hewlett-Packard, Emulex and Brocade have also been slashing the price of their storage systems this year.) Tucci denies that the product is a loss-leader and insists it was not his intention to trigger a price war with competitors, many of which charge well over $20,000 for a midrange SAN bundle.

Rollins, for his part, adds: “It wouldn’t be the worst thing if it happens, but our interest is not a price war. We fully expect this product to change the storage industry by increasing the number of customers able to afford and use networked storage.”

He may be right. EMC, which for years targeted only the high end of the storage industry, is now doing a good impression of a mid-market and even a low-end supplier via a growing body of resellers. Dell says its use of standardised technologies, supply chain efficiencies and aggressive negotiations with component manufacturers have helped push the price point under the symbolic $10,00 figure. Although EMC seems to have found a useful ally, it might however wait a while before asking Rollins to become its COO.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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