Dell to acquire Compellent for $960 million

By on December 13, 2010, 11:08 AM
Dell has announced it is buying storage company Compellent Technologies for about $960 million in cash. Compellent will help Dell expand beyond PCs and catch up with rivals Hewlett-Packard and IBM in technologies like cloud computing.

Compellent specializes in storage and recovery of data for small and medium-sized businesses. Dell says it plans to keep Compellent's existing operations in Eden Prairie, Minnesota, but will also invest in engineering, support, operations, and sales to grow the business. The Compellent deal is expected to close in early 2011. Dell's final offer for Compellent was $27.75 a share. When Dell and Compellent announced last week that they were holding "advanced discussions," Dell said it would bid $27.50 a share.

Data storage plays a crucial role in cloud computing, due to the need to access remote computing power and data over the Internet. Dell entered this market two years ago with its purchase of EqualLogic for $1.4 billion.

"We are excited about our merger with Dell. This is the next logical step in our goal to scale our products, channel and team worldwide," Phil Soran, President, CEO, and Chairman of Compellent, said in a statement. "With Dellís scale and technology leadership, we accelerate the adoption of our virtualized platform, Fluid Data, to redefine the value of enterprise storage for data centers and cloud computing."





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Guest said:

I work for EMC (market leader in storage) and I think it's pretty shady that Dell is going after Compellent. EMC has a partnership deal that is supposed to be honored until 2013. As one of our biggest resellers, we have had a good past together. However, things dramatically changed when they bought Equillogic and we saw Dell headed in a new direction. This measure to acquire Compellent completes the indication.

One can argue that it is a move they needed to make to stay on path to the future with cloud computing. As commercial PCs become unnecessary due to VDI (Virtual Desktop Infrastructure), Dell had to make a move as their primary source of income began to be replaced with a newer, more efficient technology. You can see this further exemplified in the production of Dell smart phones. Dell is headed into new markets. It seems as though many companies are headed into new markets by buying up smaller companies at a rapid rate and now becoming the Walmarts of the tech industry, a one stop shop that handles all your technology needs. Even here at EMC we have bought over 40 companies in less that 10 years and have billions in cash ready to purchase whomever, or whatever is needed to progress.

So part of me understands how the progression of the tech industry has come about and how it will continue to head but another part of me is wary to dangers of having so many parts of our lives in the hands of only a few. IBM, HP, Oracle, Microsoft...

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