Dell Completes $940M Acquisition of Compellent

By Chris Preimesberger  |  Posted 2011-02-22 Print this article Print

The acquisition is Dell's latest strategic investment in an effort to expand its enterprise storage and data center software portfolio, which also includes EqualLogic (acquired in 2007), KACE (2010) and Boomi (2010).

Following a vote of approval by Compellent Technologies shareholders on Feb. 22, Dell completed its $940 million cash acquisition ($27.75 per share) of the fast-growing maker of virtualized enterprise storage systems.

The acquisition originally was announced Dec. 13, 2010. It came three months after Dell lost a bidding war with Hewlett-Packard for 3PAR, a 10-day scuffle that inflated the price by more than 100 percent and ultimately ended up costing HP $2.3 billion.

Compellent produces the highly respected Fluid Data storage system with numerous automated data management features, including tiering, thin provisioning, snapshots and mirrored replication for enterprise data centers and cloud-computing environments. The company has long contended that the power savings of its storageware can reduce system costs by up to 80 percent.
The acquisition is Dell's latest strategic investment in an effort to expand its enterprise storage and data center software portfolio, which also includes EqualLogic (acquired in 2007), KACE (2010) and Boomi (2010).

Analyst Greg Richardson of Technology Business Research said he believes Dell's acquisition "is another milestone on the company's road to becoming an enterprise solutions vendor. Through large acquisitions ... Dell is increasingly shedding its M.O. of high-volume PC and x86 server manufacturer to become a provider of solutions that offer functionality.

"The acquisition will better align Dell with competitors IBM and HP, who can address large-scale buildouts of integrated hardware and software with their services and software portfolios."

Fast-Growing Company for Four Years

Compellent has been one of the fastest-growing block-based external storage companies in the world for the last four years, according to a number of industry analysts, including Gartner and IDC. That momentum, which works out to more than a 150 percent increase in revenue during that span of time, was telling potential acquirers something important.

No other storage company could boast that kind of growth during the last half of the decade, especially in a down economy, and that included 3PAR (acquired by HP in 2010), Data Domain (acquired by EMC in 2009) and others.

Compellent's frontline StorageCenter SAN system won a slew of industry awards during the last three years. The Eden Prairie, Minn.-based company has a fast-growing list of loyal customers that keep returning for updates as soon as they are available; StorageCenter is now selling very well.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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