When Michael Dell said last week he planned to get into storage big time, the match makers starting sizing up partners for Dell Computer Corp and Data General Corp is one of the names that keeps cropping up. DG’s troubled transition to fiber channel and reliance on one or two large OEMS such as Hewlett-Packard Co has hurt sales of its Clariion storage systems. BancAmerica Robertson Stephens’ Bret Rekas observes that with DG’s current market capitalization at nearly $1bn or 60% of revenue, Dell could easily digest DG by issuing a mere 10-12 million shares or 3% of the shares outstanding. Although Dell has no tradition of making big acquisitions, relying largely on organic growth, the company will clearly need to accelerate revenue sharply if it wants to sit at the big boys’ table. Data General’s Clariion business is worth $500m or 33% of revenue but large chunks of that would likely melt away if the business passed into another vendors’ hands making an OEM deal the most likely outcome. Dell could also make use of DG’s emerging ccNUMA clustering technology. It made no bones about sticking with low- and mid-range SMP offerings and using clustering thereafter. In addition to clustering, most ccNUMA vendors are also exploring how NT can be tweaked for cache coherency across distributed shared memory systems. Dell’s been keeping mum, officially, on its clustering strategy, but it’s unlikely it would be keen on buying core technology such as Tandem’s ServerNet from rival Compaq Computer Corp. Meantime Dell is going ahead with a manufacturing and sales center in Xiamen, south east China,.
