There was a time when Dell was only a hardware vendor. Those days are long since past now, as Dell continues to push forward into the software business. Today, Dell made its biggest software acquisition yet, bidding $2.4 billion for Quest Software.
The acquisition brings new management, security, data backup and recovery solutions to the Dell software portfolio.
"We have been making good progress in developing Dell software IP and this buy accelerates the process," John Swainson, President, Software Group at Dell said during a Monday morning call announcing the deal.
Swainson added that Dell's existing software assets, combined with the Quest Software, will create better value than just the sum of all the parts. He noted that Dell's overall software strategy is about leveraging and building the existing portfolio. After assessing what Dell already has, Swainson said the he was looking for software that has good long term potential.
"Quest brings an unbelievable foundation of assets," Swainson said. "They address many large and growing areas in industry segments worth about about $30 billion a year now and growing at $10 Billion a year."
Quest Software's assets include the Windows Server Management platform. Swainson noted that the platform gives Dell a more comprehensive end-to-end solution focused on automation of repetitive tasks. Quest Foglight is a performance and application monitoring platform that continually monitors an environment and finds and fixes issues prior to them becoming problems. Quest NetVault is a cross-platform data backup and recovery solution, while Quest Workspace is a user workspace management technology. Workspace is complemented by Quest One, which is an identity and access management solution. Rounding out the portfolio is Quest Toad, a database management platform.
The Quest products will align with Dell's focus, and Swainson pointed to a number of areas for synergy. For one, both Dell and Quest Software deal with many of the same customers. Dell will be able to expand the Quest footprint, using the 20,000 strong Dell sales force and 100,000 member channel. Swainson said that Dell's intention is to also increase research and development at Quest as well as sales capacity, as the Dell software business continues to be built out.
Initially the Quest Software business will be kept as a standalone business unit. Over time the plan is to integrate solutions more tightly with the existing Dell portfolio. Swainson noted that Quest already has 1,500 software sales people and those individuals will become the core of Dell's software sales organization as well.
One area that Dell might also be pushing into with Quest longer term is the Software as a Service (SaaS) model. Swainson noted that some of the Quest assets could be delivered in a SaaS model, though that's not his initial focus.
"Before we get into the modality of how we deliver, we wanted to first have the right solution," Swainson said. "We have the Dell Cloud business applications offering, but the Quest acquisition is about building our fundamental asset portfolio."
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