After all, there is no firm deal to acquire Compellent -- just a statement that the two are in "advanced discussions" on a possible merger. Word is that Dell has ponied up about $876 million for the company, which specializes in tiered storage and advanced data management technologies. That puts its value at about $27.50 per share despite the fact that the stock has been trading in the mid-30s since September, when Compellent emerged as the next logical target following Dell's failure to secure 3Par from HP.
Clearly, the company thinks Compellent is over-valued, which is true considering speculators have been banking on an offer from Dell. For a while after the 3Par dust had settled, Compellent was in fact trading at 91 times analysts' earnings estimates for the coming year. So in that vein, it's unlikely someone will come in with an even higher offer, particularly since most of the other platform providers already have their virtual storage components in place. Still, stranger things have happened. Note that Cisco has already moved into the server space, making storage the next logical step.
That being said, there are lots of reasons to welcome a Dell-Compellent merger. For one, Compellent has already shown that it can swim in deep waters with the likes of HP and EMC, carving out a healthy, if not exactly dominant, share of the market for structured and unstructured data management. Compellent also gives Dell a major boost in converged storage networking, particularly as it begins to deploy advanced networking technologies like 6Gbps SAS connectivity to the PowerEdge server line.
Going forward, no enterprise platform provider will last long without a full suite of virtual, cloud-ready servers, storage and networking components. These days, enterprises are in the market for solutions, not products.
Compellent is probably the best available target for Dell right now, but even a successful acquisition will simply shift the pressure to first integrate the technology and then execute a smooth introduction into the market. The rest of the industry is already moving forward. Dell can't afford any more delays.