The Dell Storage Swap program launched today promises price breaks for organizations willing to retire EMC VNX, Clariion and Celerra and NetApp FAS arrays to move to Dell Compellent and EqualLogic storage before July 31. Dell pledges “specialized migration services,” support and “other financial incentives” for customers who switch.

When a vendor offers such a swap program, you can bet sales are not strong. That is the case with Dell, which has lost market share since ending its OEM relationship with EMC after acquiring Compellent last year. The Compellent deal followed Dell’s 2008 purchase of EqualLogic. Now Dell is banking on customers switching for the incentives and becoming happy enough with the results to stay with Dell long-term.

Even if Dell’s formal swap program is new, the strategy isn’t.

Christopher Patti, director of technology for AccuWeather, said Dell gave him a good enough price to switch from EMC Clariion and Hewlett-Packard EVA storage to EqualLogic in 2008. That was merely months after Dell bought EqualLogic and while it was still an EMC OEM partner. Patti said upgrading his older Fibre Channel arrays from EMC and HP would have cost in the high-six figures. He bought two EqualLogic iSCSI SANs and has since added four more EqualLogic arrays.

“The Clariions and EVAs were ridiculously expensive, especially with day-to-day maintenance, upgrades and extra costs for replication, snapshotting and other things here and there,” Patti said. “Dell gave us a good price point.”

He said he also likes that EqualLogic data protection and management features are part of the base price and not add-on licenses. “Dell’s software makes it easy to manage the array, see where bottlenecks are and know when you have to purchase additional capacity,” he said.

Server vendors Dell, HP and IBM are losing share in the storage market to pure-play storage vendors EMC, NetApp and Hitachi Data Systems (HDS). According to Gartner’s worldwide external disk storage revenue report released this week, Dell’s storage revenue dipped 0.2% from 2010 to 2011 while the market grew 9.8%. Dell’s market share slipped from 8.2% to 7.4% during the year and it stands sixth behind EMC, IBM, NetApp, HP and HDS.

The targets of Dell’s trade-in program, EMC and NetApp, ranked first and second in revenue growth for last year.

Customers who purchased EMC storage from Dell will continue to receive support, Dell said in a statement, but it is ending its OEM and reseller deals for EMC Clariion, Celerra, Data Domain and VNX systems.

The move isn’t much of a surprise, considering Dell had already driven a large wedge into the relationship by buying its own storage companies – including several direct competitors to EMC.

Dell has sold EMC storage since 2001, and in late 2008 the vendors said they were extending their OEM agreement through 2013. Dell also widened the deal in March of 2010 by adding EMC Celerra NAS and Data Domain deduplication backup appliances to their OEM arrangement. However, the relationship had already started to deteriorate by then, going back to when Dell acquired EMC competitor EqualLogic in early 2008. The rift became irreparable last year when Dell followed an unsuccessful bid for 3PAR by completing an $820 million acquisition of Compellent in December.

Dell also acquired data reduction vendor Ocarina and the assets of scale-out NAS vendor Exanet in 2010, giving it more storage IP to integrate with its platforms.

Even before Dell bought Compellent, EMC CEO Joe Tucci a year ago said the once tight relationship between the vendors “cooled off” after Dell tried to buy 3PAR. A Dell spokesman responded by saying EMC still played an important role in Dell’s storage strategy.

There has been no OEM deal for EMC’s VNX unified storage system launched last January, although Dell did have an OEM deal for the Clariion and Celerra platforms that VNX replaced. EMC has built up its channel this year, making the SMB VNXe product a channel-only offering that directly competes with Dell products. Last week EMC launched a channel-only Data Domain DD160 SMB system.