Dell is investing a lot of effort into its storage business in order to stay relevant to the market, and is competing with the four main players as a result: EMC, NetApp, Hewlett-Packard and IBM.  The company’s latest development in this area is the addition of  scalable network-attached storage and unified storage capabilities to its EqualLogic line-up. These are also introduced as new Fibre Channel additions to its Compellent and PowerVault product families.

“In the past year, Dell has made a number of acquisitions in the storage sector – Compellent, Exanet and Ocarina Networks [2] and is targeting the fast growing market for big data in the face of stiff competition from players like EMC, NetApp, HP and IBM,” reports Forbes.

“We estimate that storage makes up less than 5% of our $20.12 Trefis price estimate for Dell, which is about 30% above the market price.”

EMC and NetApp, two of the largest players in the storage industry, have a combined market share of 80 percent. Dell is currently the fourth largest vendor in the disk storage systems space, and had a market share of 11.4 percent in the first quarter of 2011, compared to 12.7 percent a year earlier. Its share is expected to grow year-over-year though: about 11 percent this year, compared to 9.5 percent in 2010.

Dell is working hard to accomplish this goal, and had yet another storage update today. According to Dell storage head Darren Thomas, the company is looking into putting flash in its application servers. It’s not the only one going this route.  EMC is also working a similar initiative, and if putting solid state cache in servers will prove to be more effective than Flash Cache in the array controller – NetApp’s approach – the latter may have to face a serious challenger.

Just like Dell, NetApp is seeing a growing market share around storage. So much so, it was upgraded from Neutral to Outperform by Credit Suisse. The two companies are very serious about storage, a theme that was not missed at the Dell Storage Forum, which featured several product launches and talk of Dell’s future.

Hewlett-Packard held the HP Discover conference earlier this month around the same time, and is expanding in the storage market from a different angle – with an upcoming cloud locker offering, among other products and services.