Dell's new $60M fund aims to revamp storage industry economics

Dell is launching a new $60 million investment fund to bring enterprise-grade storage technologies to the mid-market level.

Dell CEO Michael Dell unveiled the plans for a new $60 million early-stage investment fund during Fortune's Brainstorm Tech 2012 conference in Aspen on Tuesday.

Dubbed the Dell Fluid Data Storage Fund, the initiative is being fueled by the company’s investment arm, Dell Ventures.

The main priority for this initiative is basically to revamp the entire storage market. Specifically, Dell reps said that the Round Rock, Texas-based computer maker is looking to "change the economics of the storage industry by bringing high-end enterprise features to the broad mid-market and solving enterprise problems at a midrange price point."

Here's how the fund will work. Dell Ventures is planning to invest in five to 10 "promising" storage startups. From there, Dell will obtain equity positions in the selected companies, with average investments of $3-5 million per round.

Dell Ventures is honest in saying that it is interested in investing in areas strategic to Dell's business, but what they find could always end up applying to the industry overall. Right now, Dell's fund will invest in the growth of the following sectors: storage, servers, networking, cloud computing and virtualization, big data analytics, mobility, end-user computing, and software.

Jim Lussier, managing director of Dell Ventures, acknowledged in prepared remarks that this is a large undertaking with "inherent risks of early stage startups." Nevertheless, he argued that Dell is "already gaining ground" in a market with "ever increasing implications."

Through internal development, investments and acquisitions, Dell’s Fluid Data architecture is helping customers manage explosive data growth with the industry’s most efficient, innovative and cost effective storage solutions. Dell acquisitions have transformed our company from a reseller of storage to a leader in delivering its own storage intellectual property.

Furthermore, Lussier explained that Dell Ventures is forming a cross-functional team of professionals and executives from a variety of backgrounds (i.e. storage, software, corporate development, etc.) to form an expert panel of sorts to oversee the acquisitions. The team will be responsible for continued oversight throughout the life cycle of investments, from idea to incubation to market.