Dell's storage business has netted the company $1bn in revenue in its 2003 financial year, which represented 20% of its total revenue and 87% growth year on year.
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In the previous quarter alone, Dell reported a 46% increase in its storage sales, and the company sees even more growth on the horizon.
Much of the success can be attributed to its partnerships with EMC and Microsoft.
Earlier this month, Dell announced it enhanced its Nas appliances to run Microsoft's latest Nas operating system - Microsoft's Storage Server 2003.
Last June, Dell extended its reseller agreement with EMC.
The deal now runs through to December 2008, two years more than the original agreement signed in October 2001, and permits Dell to manufacture the CX200, the lowest end of EMC's midrange Clariion line, in its three manufacturing facilities.
"Our partnership with EMC was done to increase our revenues and address more market," said Russ Bailey, a senior product manager for Dell's storage group. "[Manufacturing in-house] allows us to take advantage of our supply chain processes and facilities."
However, success in the storage market for Dell did not come overnight. The company initially resold storage systems developed by Quantum and Network Appliance. Those two agreements fell apart when Dell realised it could make its own storage systems at a much lower cost.
The development of the CX200 in-house and the work Dell has done to influence EMC's manufacturing process, it is likely Dell will replicate its success this year.
Scott Tyler Shafer writes for InfoWorld