Mike Fratto

Network Computing Editor

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Dell's SonicWall Acquisition Follows Cheap 'n Easy Blueprint

Dell's Sonicwall acquisition makes sense. Dell's strategy is to sell low-cost desktops, laptops, and servers that are cheap and easy to use to everyone from small companies up to mid-size enterprises with the occasional large enterprise in the mix. Dell is going to do with security what they did with storage and are doing with networking. Remove complexity, bring important features to the surface, and make the resulting products available to the largely under served SMB/SME market.

HP has all but dropped out of the SMB/SME race, and though CEO Meg Whittman is trying to turn that ship around, it's a huge opportunity for Dell to capitalize on. "The more HP stumbles around like a drunken college student, the more Dell's strategy makes sense," says Art Wittmann, director of Informationweek Reports. "Dell can take the whole mid-market to themselves while HP wakes up face down in pool of its own vomit wondering what happened." Dell also gets access to Sonicwall's 15,000channel partners. While some overlap is likely for those channel partners that Sonicwall services and Dell doesn't, expect Dell to offer its entire portfolio. The acquisition also helps Dell diversify its offerings, which is crucial as the margins on PCs and laptops continue to get squeezed by tablets and low-cost netbooks from the likes of Asus and Samsung.

Dell representatives were quick to point out that they see the Sonicwall acquisition as a software buy, which doesn't make sense if you consider only Sonicwall's firewall and UTM appliances. Granted, Sonicwall is well known for hardware appliances and appliances fit right into Dells strategy when you look at their Equalogic and Kace acquisitions. But an appliance is just a form factor, it's the software that runs on and manages the appliances that's important to Dell.

Did you know that Sonicwall also has a strong management product for its firewall and UTM appliances with its Global Management System (GMS). GMS can scale from as few as 5 firewall's in to the 1000's with features like distributed firewall management, a strong rights management system that allows administrators to define down to the field level what distributed administrators can do, and reporting across their product line. It's an impressive management system that Sonicwall has kept secret and I bet Dell will start to integrate it with other software systems from Kace for system management and AppAssure Back-up.

One analyst says the managed services purchase paved the way for the SonicWall acquisition. "When I asked if Dell believed this deal would have occurred if it did not have the SecureWorks assets under its control, the company claimed that it most likely would have - though I am skeptical," says Andrew Hay, Senior Security Analyst, Enterprise Security Practice for the 451 Group. "I believe Dell required the security DNA and the managed services side of SecureWorks to drive its security and compliance desires. Without that piece in the Dell portfolio, I suspect that Dell might have passed on the SonicWALL acquisition, possibly delayed it for more due diligence or perhaps even looked at a different sector before pulling the trigger."

Today, Secureworks is a managed service that manages customers' existing products. With Sonicwall and GMS, I'd expect Dell to expand their management portfolio to include the deployment of Sonicwall security appliances coupled with 24x7x365 management aimed squarely at the SMB/SME market.

The acquisition creates a bit of product overlap with Cisco, Netgear, and Watchguard's firewalls and wireless APs which Dell resells. When I asked Dell what they would do regarding those partnerships, company executives danced an uncomfortable dance. It was clear they weren't prepared to make any commitments, and they probably hoped nobody would ask. But if history is a guide, looking at what they did with Junipers EX switch line after they acquired Force10, we'll likely see Dell maintain the current partnerships until they fully digest Sonicwall, and then they will stop selling competitors products.

Dell is clearly moving into a position to offer enterprise-class products to the SMB/SME space and is putting together a set of products that fit the bill and I bet there are more acquisitions in the wings. The challenge for Dell, like any company on an acquisition spree, is integrating these products into a cohesive suite versus a bunch of products under a single name.

Mike Fratto is editor of Network Computing. You can email him, follow him on Twitter, or join the Network Computing group on LinkedIN. He's not as grumpy as he seems.

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