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Dell sticks to storage plan

The company will stick with its online business strategy in storage, even as rivals in the market adopt other business models.

SINGAPORE--Dell Computer will stick with its online business strategy in storage, even as rivals in the market adopt other business models.

Bruce Kornfeld, Dell's director of worldwide storage product marketing, said the online business model allows the company to reduce costs by selling directly to customers and eliminating the middleman.

According to a company representative, Dell's global enterprise storage business registered year-over-year growth of 13 percent for the fiscal year ended June 2001. The representative did not provide further details.

Although better known for its strength in online desktop and notebook sales, Dell has been selling storage hardware for the past three years. It offers customers a range of storage systems, from low-end tape storage to fiber channel-ready storage area networks (SANs).

Kornfeld was in Asia for Dell's Tech Summit in Penang, Malaysia. He said he didn't foresee Dell adopting a "storage service provider (SSP)" strategy of providing storage as a metered online service, as many other storage companies have done.

Kornfeld said he could see more storage companies heading the SSP way as they look for higher profit margins outside the competitive storage hardware market.

Simon Penny, Dell's storage marketing director for the Asia-Pacific, said adoption and acceptance of the SSP model in the Asia-Pacific region would lag behind the U.S. market due to bandwidth restrictions.

Another problem with the SSP model, he said, is the difficulty in persuading some customers to give up sensitive data to another party. While this outsourcing may be attractive to some, he felt many companies would be unwilling to risk letting business-critical data get out of their control.

Staff writer Ken Wong reported from Singapore.