Dell’s clever strategy for the datacentre

closeThis article could be out of date, as it was published 2 years 5 months 13 days ago.

Dell’s purchase of SonicWALL in March this year raised a few eyebrows in the technology sector, but in fact it’s all part of a broader strategy called ‘better together’ that involves acquiring and house-branding complementary product ranges under the Dell umbrella.

One of the first examples of the strategy was the acquisition of the storage brand EqualLogic way back in 2007. Prior to the acquisition Dell direct and its channel partners collectively represented the largest seller of EMC storage solutions globally. Now the same teams almost exclusively sell and recommend the company’s own Dell-branded solutions, created with the help of the EqualLogic acquisition.

More recently, the strategy has been executed with the acquisition of Force10 on the networking side. Force10 is currently being combined with Dell’s existing (albeit small) networking offering to create a formidable networking and switching vendor. Once again, Dell’s direct sales organisation and channel partners globally are now directing networking product sales that might have ended with Cisco or Juniper back to their own brand.

On top of this overarching strategy, Dell recently hired US-based venture capitalist and ex CA executive John Swainson. His mission was to create a successful software division for Dell, and he has been the mastermind behind the SonicWALL purchase (read our story about the acquisition here).

Initially it looked like a strange acquisition – what would a hardware company want with a security business making most of its profits out of subscription licensing? Not to mention the fact that security spend only represents a measly 5-10% of the datacentre. But in the context of the ‘better together’ strategy, it now seems pure brilliance, as every Dell server being installed requires storage, network switching and security, all three of which Dell now offers.

The question is, what product range will Dell turn into a house brand next?

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