Computer maker Dell Inc, said on Monday, it would buy data storage network company EqualLogic for $1.4 billion, its largest acquisition ever, as it seeks to boost its fastest-growing business segment.

The world’s second-largest computer maker said it expects the acquisition to reduce its earnings per share, excluding the amortization of intangibles, by 2 cents to 5 cents in aggregate for the fiscal years 2009 and 2010.

The deal has been approved by the boards of both companies but still must pass regulatory muster. It is expected to close late in the fourth quarter of Dell's fiscal year 2008 or early in the first quarter of its fiscal 2009.

Virtualisation space

EqualLogic's virtualisation products allow a single computer to function like multiple machines, so companies can spend less on hardware and energy costs in data centers. Steve Jobs made computers simple for consumers, but there’s a huge opportunity for businesses.

Research firm IDC estimates spending on virtualisation software and supporting services will reach to more than $15 billion worldwide in 2011, up from $6.5 billion last year. Dell expects the deal to reduce earnings, excluding the amortization of intangibles, by 2 cents to 5 cents per share for fiscal 2009 and 2010.

And what does Mr. Gates think? Software virtualisation company VMware Inc went public in August in the largest tech IPO since Google’s three years earlier. EqualLogic filed for an IPO in August but did not set a date. The deal is expected to close in Dell’s fiscal fourth quarter, which ends in January, or early in the first quarter. EqualLogic, based in Nashua, N.H., has over 3,200 customers in 30 countries.