Dell Targets High Growth Storage Market

June 14th, 2011 by Trefis Team
13.56
Trefis
DELL: Dell logo
DELL
Dell

Dell (NASDAQ:DELL) on Tuesday announced that it is beefing up its storage solution portfolio in several high growth areas. In particular it added new scalable network-attached storage (NAS) and unified storage capabilities to its EqualLogic product family as well as new Fibre Channel additions to its Compellent and PowerVault families. [1] In the past year, Dell has made a number of acquisitions in the storage sector – Compellent, Exanet and Ocarina Networks [2] and is targeting the fast growing market for big data in the face of stiff competition from players like EMC (NYSE:EMC), NetApp (NASDAQ:NTAP), HP (NYSE:HPQ) and IBM (NYSE:IBM).

We estimate that storage makes up less than 5% of our $20.12 Trefis price estimate for Dell, which is about 30% above the market price.

Dell Aims to Gain Storage Market Share with Addition of NAS

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Dell is focused on the development and acquisition of storage intellectual property that delivers productivity and efficiency gains for highly-virtualized data centers. The addition of NAS capabilities to its EqualLogic line is a big deal in terms of helping its channel partners better compete with EMC  and NetApp, the mainstays of the NAS market with a combined share of ~80%. [3]

Dell currently is the fourth largest player in the total disk storage systems market and had a revenue share of 11.4% in 1Q11, down from 12.7% during the same period last year. On the other hand NetApp, which has strong presence in the NAS market – one of the fastest growing segments in storage industry – saw its share in total disk storage systems market jump up to 10.1% in 1Q11, up almost 2 percentage points from last year.

We currently forecast Dell’s disk storage market share (of GB) to increase slightly going forward from 9.5% in 2010 to ~11% by the end of our forecast period. However, a faster growth in Dell’s share as a result of addition of NAS capabilities to its storage product line would result in an upside to our near $20 Trefis price estimate for Dell.

See our full analysis of Dell

Notes:
  1. Dell Delivers New Storage Solutions for the Virtual Era Built on Its Fluid Data Architecture, Dell [↩]
  2. Dell Adds NAS To EqualLogic, Fibre Channel To PowerVault, crn.com [↩]
  3. Total Disk Storage Systems Market – 1Q11, IDC [↩]