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"Founder and CEO Michael Dell. Image: Dell\n\n\nMichael Dell\u2019s old game plan was ruthless and effective: Crush competitors by building products at a lower cost, and using the Internet to pass the savings on to value-conscious customers. That strategy made his namesake company a darling of the first Internet boom and the largest computer maker in the world.\nBut times have changed. In recent years archrival Hewlett-Packard (HPQ) has stolen Dell\u2019s (DELL) global PC crown by using HP\u2019s larger size to cut costs and its retail relationships to grow sales. And while Dell has struggled, companies like Apple (AAPL) are using design savvy to simplify computing experience through devices like the iPod and iPhone.\n\nTo face these challenges, Dell is changing too \u2013 and there\u2019s no clearer sign than the company\u2019s announcement Monday that it intends to buy privately held data storage provider EqualLogic for $1.4 billion. The size of the deal is remarkable for a company that once dismissed big acquisitions as unworkable. EqualLogic not only marks the biggest acquisition in Dell\u2019s history, but also the most any company has paid in cash for a venture-backed startup. The deal is expected to close in February, and Dell expects to keep most of the company&amp;#8217;s nearly 400 employees.\n\n  \n    Microsoft\u2019s Zune: The sequel (Photos 1-4)\n  \n\nThe change is more than just talk. The move to buy EqualLogic shows Dell is willing to place billion-dollar bets on a different way of doing things. The old Dell didn\u2019t do many big purchases; when IBM (IBM) sold its PC business to Lenovo, CNET quoted Michael Dell saying, \u201CWe&amp;#8217;re not big fans of the idea of taking companies and smashing them together. \u2026 When was the last time you saw a successful acquisition or merger in the computer industry?\u201D\nExplaining why Dell is making the move, executives say buying EqualLogic fits the company\u2019s new emphasis on simplicity. Nashua, N.H.-based EqualLogic uses hardware and software to help organizations like Fidelity Bank and Yale University more deftly manage their sea of digital information by allowing them to access data faster and pinpoint problems. EqualLogic&amp;#8217;s technology for creating storage area networks is known for being easy to upgrade and having an easy-to-use interface. Dell will incorporate it into future versions of its PowerVault storage line.\n\n  \n    The best-designed Bluetooth gear (Photos 1-8)\n  \n\n\n\n\n\n\nSVP of Business Product Group, Brad Anderson. Image: Dell\n\n\nSuch storage technology is a fast-growing area for Dell. The company says sales for the segment recently have grown 24 percent year-over-year. Better yet, EqualLogic\u2019s area of specialization in storage, a method called iSCSI that uses Ethernet to move data instead of a more common method called fibre channel, is projected to be the fastest-growing segment of the market. Dell plans to continue to sell EMC\u2019s (EMC) fibre-channel based storage solutions as well.\nEqualLogic\u2019s technology isn\u2019t cheap for companies  to buy; but that fits Dell\u2019s new strategy, too. Rather than focus mainly low prices as its selling point for customers, Dell is seeking to position itself as an innovator that will streamline the maddening process of buying and maintaining business technology. This is a change in strategy for Dell, whose competitors have traditionally criticized the company for running a tight operation but not fostering innovation.\n\u201CIt\u2019s fair historically, if you go back a year or so, that you would have thought of Dell as more of a fast follower,&amp;#8221; said Brad Anderson, senior vice president of Dell\u2019s business product group. &amp;#8220;But we recognize that if we want to solve our customers\u2019 problems and provide leadership, we\u2019re going to need to jump in very early.\u201D\nIt\u2019s a message that comes straight from the top, now that Michael Dell has retaken the reins as CEO.\n\u201CWith Michael coming back, things are a little bit different,\u201D Anderson, said. \u201CCompany-wide, we are driving IT simplification very hard. It is our strategy; it is our mission. It\u2019s also driving a cultural change within Dell.\u201D"^^<http://www.w3.org/2001/XMLSchema#string>
<http://fortune.com/2007/11/06/dells-new-mantra-technology-thats-simple-not-just-cheap/>