Dell, EMC Corp. Ink 5-Year Deal

Tuesday, October 23rd 2001, 12:00 am
By: News On 6

AUSTIN, Texas (AP) _ Dell Computer Corp. said Monday it would sell EMC Corp.'s data-storage equipment in a 5-year deal that the companies said could be worth billions of dollars.

Financial terms were not disclosed.

Under the deal, EMC's Clariion line of storage systems will become Dell's standard offering for some types of computer networks and will carry both companies' names.

Dell, the largest maker of personal computers, hopes the deal will allow it to move into the market for storage equipment that runs on Unix operating systems.

Austin-based Dell has been expanding beyond its PC stronghold to protect itself from falling prices and a slowdown in demand for PCs.

Dell president and chief operating officer Kevin Rollins said the agreement would double Dell's market opportunity in the data-storage business. Dell plans to begin selling the EMC products next month.

EMC, based in Hopkinton, Mass., figures to use Dell's sales force to expand its presence in the growing market for storage gear that runs on Microsoft Corp.'s Windows NT and Windows 2000 systems.

EMC is looking to reverse a long slide that has seen its stock lose nearly 90 percent of its value in the past year.

EMC president and chief executive Joseph Tucci said the deal would help his company gain sales among small and medium-sized businesses, a market that he placed at $15 billion last year but that EMC was ``barely scratching the surface.''

EMC is the largest maker of equipment that corporations use to store their computerized information. Dell and EMC said the market for such equipment will reach $100 billion in sales by 2005.

Sean Derrington, an industry analyst with research firm Meta Group, said the deal will greatly benefit both companies by bringing together two information-technology giants.

In trading Monday, Dell shares rose 50 cents to close at $24.55 each on the Nasdaq Stock Market, while EMC shares rose 68 cents to close at $12.19 on the New York Stock Exchange.