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Dell becomes key software player with Quest purchase

We've watched the IT industry transform itself in the last few decades, moving from the idea of having everything fully integrated to a more best-of-breed "a la carte" style of computing solutions. But now the pendulum is swinging back and we appear to be moving toward a highly integrated, proprietary stack of hardware and software solutions again. Or at least, that seems to be the direction hardware vendors are trying to take us in.

As an example, Dell has made no secret of its desire to become much more than a hardware vendor. To further that goal, the company recently announced it has entered into a definitive agreement to acquire Quest Software after concluding a bidding war with Insight Venture Partners. Quest originally received a $23 per share bid or a $2 billion offer from Insight Venture back on March 9. Dell's winning price tag was announced at $28 per share, or $2.4 billion.

So why did Dell pay a 44 percent premium for Quest, based on the company's closing price on March 8? And what exactly does Dell hope to get for its money? Dell may be the No. 3 computer manufacturer in the world, but the company knows that to keep up with the changing marketplace it needs to expand beyond PC and server sales. One way to do that is to expand into a growing and profitable software business, which will also allow the company to move into new markets. With this acquisition, and the other moves recently made, Dell is off to a pretty good start.

It's important to note that the Quest acquisition isn't Dell's first venture into the software market. The compan has completed a number of other valuable software acquisitions, most notably AppAssure, Boomi, Kace, Scalant, SonicWall, and Wyse Technology. And to tie all of this together, back in February Dell announced the hiring of John Swainson, a 26-year IBM veteran and former CEO of CA, to serve as president of its newly created software group.

The Quest acquisition brings to this new software group a portfolio of cost-effective system management products designed to simplify the management of IT. Some of its key areas include database management utilities, Windows Server management, application performance monitoring, data protection, identity and access management, and user workspace management. Within these categories, Quest brings solutions for the physical, cloud, and virtual environments, which could immediately pole vault Dell to the front of the line as a major virtualization and cloud software leader, thanks to technologies Quest gained through acquisitions of Vizioncore, Surgient, and most recently VKernel.


Read the entire InfoWorld Virtualization Report article.

Published Thursday, July 05, 2012 2:32 PM by David Marshall
Filed under:
Dell becomes key software player with Quest purchase « VT News - (Author's Link) - July 5, 2012 3:50 PM
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