Dell Inc. (DELL - Analyst Report) recently announced that Grow Financial, one of the leading credit unions, has deployed a host of its data center appliances. Detailed financial terms of the deal were not mentioned.

Florida-based Grow Financial’s Federal credit union is run by 500 employees across 18 locations. It manages an asset base of roughly $1.6 billion. A long-time Dell customer, Grow Financial has been deploying various consumer class and enterprise class products in order to efficiently manage its data center and overall IT eco-system.

Grow Financial’s data center is now leveraging Dell’s current storage portfolio, which includes Compellent storage arrays, PowerEdge servers and KACE Appliances. The company replaced its existing storage management system, which was run by EMC Corp. (EMC - Analyst Report).

Dell's storage systems led the Fed credit union to achieve an operational efficiency (storage optimization) of 30% and storage management cost reduction of 50.0%, leading to higher return on investment. Apart from storage appliances, Grow Financial has also opted for Dell’s desktop and notebook line-up.

The names Compellent and KACE are quite familiar to us since these were the most important acquisitions of Dell in recent times. The company took over Compellent Technologies in December 2010 at a very pricy consideration and made itself a key player in the cloud-based enterprise data storage systems market.

KACE Networks, a server appliance specialist, was acquired in February 2010. With the acquisition, Dell was able to offer server support for inventory management and asset management specifically to the SMBs (small and medium businesses).

Dell has been working hard to expand its storage portfolio for the past few years. It entered the storage market in 2008 with its purchase of EqualLogic. However, the company had no luck with its much-hyped bid for 3PAR Inc., losing out to archrival Hewlett-Packard Co. (HPQ - Analyst Report) in August 2010. 3PAR provides highly virtualized storage solutions with advanced data management features, such as dynamic tiering and thin provisioning for cloud computing environments.

But the tech giant made up for the loss through consecutive acquisitions on the storage front. We believe that its increased focus on the storage vertical will be extremely beneficial for Dell, since this is expected to be one of the fastest-growing segments within technology for the next five years. Dell currently generates roughly 3.0% of total revenue from its storage business.

The company reported disappointing first quarter results, with both revenue and earnings per share (EPS) declining on a year-over-year basis. Moreover, EPS was also below the Zacks Consensus Estimate. Based on current PC demand trends, level of consumer spending and macro uncertainties, we think that the second quarter guidance is a bit aggressive. However, the growth in Servers and Services segments are encouraging.

Currently, Dell has a Zacks #3 Rank, which implies a short-term Hold rating.