Dell becomes key software player with Quest purchase

Dell wins a bidding war that will help it expand into virtualization, cloud, database, and identity management

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Swainson said that Dell's software strategy is focused on addressing these customer needs with three key tenets:

The first aspect of which is to leverage and build upon our existing software portfolio. After going through the process of assessing Dell's software assets, after I joined the business, it was clear to me that we had a good base of software IP from which to build both standalone and embedded within our hardware solutions.

Second, we're in the fortunate position of not having a large legacy hardware or software base. So, we can look forward to emerging technologies that will potentially cannibalize some of those opportunities, rather than look backwards at supporting legacy that might constrain our thinking or offerings. Our solutions will focus on the current problems with a particular aspect, or a particular focus on simplification and automation in solving our customer's needs.

Finally, we're going to be focused on key areas of software where we think there's good, long-term potential that will integrate well with Dell's existing hardware and services businesses. Quest brings us an unbelievable portfolio of software assets that we're going to use as the foundation of our software solutions business. The Quest assets address many large and growing areas of the industry. In total this industry segment is about $30 billion and is expected to grow at $10 billion a year for the next four years.

Competitors like Hewlett-Packard and IBM have long offered a software stack solution around their own branded servers. IBM's management software strengths go back to its Tivoli product line, which was later bolstered by its purchase of Platform Computing. HP has been building out a software division of its own, building on the strengths of its Operations Manager product line. Both companies have been expanding to provide private, managed, and public cloud services as well.

Watching other hardware vendors, Dell must have realized there needs to be more to its future than hardware alone. Growth will come from delivering end-to-end solutions, but the company will need more software expertise if it plans to pull off the plan. With the Quest acquisition, Dell gains nearly 1,500 software sales experts and 1,300 software developers to make that happen.

By adding Quest to Dell's software division, Dell will have about $1.2 billion in annual revenue ($857 million from Quest), a figure that could double within a few years if Dell makes good use of its acquisition.

The key will be to see how Dell addresses the overlap in software technologies gained with this acquisition from what it already has in play, as well as how it handles bringing these technologies together into a cohesive offering. Acquiring software technologies when you have the money to do so is easy. Stitching all of those technologies together so that it makes sense for the end-users is the tricky part -- even for software industry veterans. Dell has an opportunity and a challenge ahead of it.

This article, "Dell becomes key software player with Quest purchase," was originally published at InfoWorld.com. Follow the latest developments in virtualization and cloud computing at InfoWorld.com.

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