Dell Bolsters Channel Ties with $1.4B Acquisition of EqualLogic

| About: Dell Inc. (DELL)

Dell (NASDAQ:DELL) said Monday it will buy storage vendor EqualLogic in a deal worth $1.4 billion in cash.

EqualLogic makes iSCSI storage area network gear that’s optimized for virtualization. Dell’s motive is to use EqualLogic to bolster its storage lineup and channel ties.

Dell added that the EqualLogic purchase will hurt its earnings per share outlook by about 2 cents a share to 5 cents a share in fiscal 2009 and 2010.

While the storage lineup is worthwhile, Dell seems to see that channel as a big benefit to the deal.

In a statement, Dell said:

Dell plans to grow EqualLogic’s successful channel-partner programs with current and future EqualLogic-branded products, and also plans to incorporate EqualLogic technology into future generations of its Dell PowerVault storage line available through the channel and direct from Dell.

Coupled with Dell’s partnerships on the retail side of the house the PC vendor seems to be getting channel religion.