Dell Announces Plans to Ruin EqualLogic's Customer-Service Rating
Its footing in the PC market slipping the way it has been–thanks to a deteriorating reputation for customer service and aggressive rivals–Dell is increasingly turning its attention to storage. In a big way. This morning the company announced plans to acquire storage virtualization outfit EqualLogic for $1.4 billion in cash. If approved by shareholders, the deal would be the biggest acquisition in Dell’s 23-year history.
Why is Dell so hot for a six-year-old company that, according to papers filed with the U.S. Securities and Exchange Commission in August, made just $68 million in revenue last year and has never been profitable? Well, for one thing, EqualLogic is maker of iSCSI storage-area network virtualization technology–the fastest-growing part of the storage business.
For another, shares of VMware–the current leader of the storage business–have quadrupled since the company went public nearly three months ago (in August EqualLogic filed to go public, something it now won’t have to do).
Finally, it makes Dell more of an enterprise company and less of a box builder. Which is likely a good idea for a company that ranks near the bottom of the American Customer Satisfaction Index’s annual rankings of personal-computer makers.