Is Dell (NASDAQ: DELL) ready to begin a slew of acquisitions? Once loathe to make large buys, the company has acquired storage provider EqualLogic in the recent past, a sign that the world's second-largest PC maker sees a bright future for corporate storage. No, we're not talking those 10'x20' rentals for the boat, but for digital storage, as in hard drives.Sun Microsystems (NASDAQ: JAVAD) purchased StorageTek a few years ago, and then IBM Corp. (NYSE: IBM) bought NovusCG just recently, so storage technology and solutions providing is apparently a hot ticket these days. Dell, one to spend hardly anything on any company compared to the competition, spent $1.4 billion for EqualLogic.
What Dell intends to do is fold this into its PowerVault storage business. Why? Storage virtualization, which is the hottest buzz word these days when it comes to the massive amount of digital storage most large companies need, without having to maintain a ton of hardware to do so.
Dell's PC business is a commodity -- there's no question about that. Regardless of colors, styles and other features, almost all PC manufacturers are selling commodities differentiated only by marketing. Dell's move to play more into the business storage market (where it already sells most of its PCs anyway) says that the future -- in terms of margins -- is not in PC manufacturing, but perhaps in special nice areas like digital storage management. Perhaps Dell wants to become a solutions provider itself one of these days? IBM dropped its hardware business years ago to focus on services and consulting, right?
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