In a move that will help it expand its storage and virtualization offerings, Dell announced Nov. 5 that it will acquire storage startup EqualLogic for $1.4 billion.

The acquisition, which is expected to close either by the end of 2007 or the first quarter of 2008, is also expected to strengthen the Round Rock, Texas, company's channel program after it begins incorporating EqualLogic's technology into its PowerVault storage portfolio.

EqualLogic, which earlier this year announced that it would pursue an initial public offering in the wake of VMware's successful stock announcement, incorporates iSCSI storage protocol into its products.

Storage remains one of the most talked about areas of IT management, and Dell is jumping into the market as more and more storage capacity is being shifted to IP SANs (storage area networks). The iSCSI SAN market is expected to grow from about $600 million in 2006 to $6 billion in the next five years, according to IDC.

One of EqualLogic's products is PS Series SANs, a combination of storage disk arrays and storage management software that use iSCSI, or storage over IP, which is designed to be more cost-effective than traditional Fibre Channel storage systems. EqualLogic employs a virtualized architecture that lifts stored data from disks and allows the storage arrays to share resources and balance workloads.