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Wyse Can Add Up to $2.5B to Dell Revenues

Financial details of the purchase price of today's announcement that Dell will acquire privately-held Wyse Technology were not released, but company executives put Wyse' 12-month revenues at $375 million, up 45% year-over-year. The associated server, storage and services revenues attached to the original thin-client sale average 5X, i.e. $5 of additional hardware, software and service sales for every $1 of the Wyse sale.

Financial details of the purchase price of today's announcement that Dell will acquire privately-held Wyse Technology were not released, but company executives put Wyse' 12-month revenues at $375 million, up 45% year-over-year. The associated server, storage and services revenues attached to the original thin-client sale average 5X, i.e. $5 of additional hardware, software and service sales for every $1 of the Wyse sale.

According to the officials, IDC says Wyse and HP accounted for between 50-70% of the thin-client market, with the next closest competitor holding at most 10%. IDC puts this market growing at 15% per year, and the end-to-end datacenter infrastructure stack for these solutions is expected to exceed $15 billion by 2015. Dell expects this acquisition to expand its enterprise solutions portfolio and offer customers a broader array of solutions.

The acquisition of Wyse is the next step in our end user computing strategy, says Jeff Clarke, president, End User Computing Solutions at Dell. To date, Dell has relied on shared IP (intellectual property) and with Wyse we're now moving more to Dell-owned IP. The Wyse desktop virtualization capability complements Dell’s strongest-ever device and computing solutions portfolio, and strengthens our position in offering customers among the broadest set of computing choices from the edge to the core to the cloud, he says.

While a CDW survey late last year found that client virtualization is more complex to implement than they realized, that ROI is difficult to calculate, and that training end users can be a challenge, 90% of businesses are considering or implementing client virtualization projects, most of them within the next 12 to 24 months. Of those with client virtualization plans, 61% said the driver is an expected reduction in IT costs; 40% are looking for easier distribution of software; 38% aim for increased IT productivity; and 37% seek to improve IT support services.

For a number of companies, including EqualLogic, Kace and Compellent, being acquired by Dell has been very rewarding. Under Dell's stewardship, the Kace customer base grew from 1,200 to more than 4,600 in 2011.

Dell grew its storage platform revenues--including its Equallogic and Compellent units--15% year over year in 2011, and they now represent nearly 80% of its storage revenues and more than 90% of its storage profits. Since the acquisition of Equallogic in 2008, Dell has grown its customer base seven-fold and has vaulted EqualLogic to the best-selling iSCSI solution worldwide. Last February's acquisition of Compellent resulted in more revenue and new customers in the first half of 2011 than Compellent had on its own in all of 2010.

Ranked first in thin-client unit shipment volume in 4Q 2011, Wyse has shipped more than 20 million units, 1 million in 2011, and has over 200 million people interacting with its products each day. It has more than 3,000 resellers and serves customers in more than 50 countries.

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