Dell has agreed to buy storage specialist EqualLogic for $1.4bn (£700m) in cash, its largest-ever acquisition.

Dell said its product range and expertise in simplifying and virtualising IT for customers globally will be strengthened by the deal.

And the supplier's users will benefit directly, said chairman and chief executive Michael Dell.

“Our customers will be dealing with the largest increase in data we have seen in our history over the next few years,” said Dell.

“Leading the iSCSI revolution will help Dell accelerate IT simplification and virtualisation and will drive the Dell value proposition into more areas of the enterprise storage business,” he said.

EqualLogic is a leading provider of high-performance iSCSI storage area networks (Sans), the fastest growing area of the storage business.

Dell intends to grow EqualLogic’s channel partner programmes with current and future EqualLogic-branded products once the deal is complete.

EqualLogic technology is also likely to be incorporated into future generations of Dell PowerVault products.

The boards of both companies have approved the deal, which is now subject to regulatory approvals and customary closing conditions.

The deal is is expected to close late in the fourth quarter of Dell's financial year 2008, or early in the first quarter of 2009.