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Nine Dell Acquisitions: From EqualLogic to Quest, Compellent to Boomi

  • 1. Quest: Dell's acquisition of Quest Software is just the latest in a line of purchases made since 2008, when it acquired iSCSI storage vendor EqualLogic. Quest had been on a buying spree of its own, acquiring almost as many companies as Dell in the same period. Dell has its work cut out for it to integrate the product suites and trim the overlap.

    The three key wins for Dell with the Quest purchase are windows server management, identity and access management, and application performance management. Overall, those areas touch on much of Dell's management platforms for SMB/SME, data centers and cloud computing.

  • 2. EqualLogic: The purchase of EqualLogic in 2008 is probably the most important Dell acquisition. Not only did it signal that Dell was serious about iSCSI storage with a $1.4 billion acquisition, but it also formed the foundation for its enterprise strategy. Dell could now sell servers and Ethernet-based storage to its SMB/SME customers, but in some cases, nip away at storage partner EMC in the data center.

    Dell not only retained the majority of EqualLogic employees, but also aggressively expanded the team to meet demand and integrate EqualLogic with its existing products and with other storage acquisitions like deduplication vendor Ocarina and NAS vendor Exanet.

    Dell understands the SMB/SME space. Those companies often have the same demands as larger enterprises but don't have the expertise to make efficient use of complex enterprise systems. One of Dell's overriding philosophies is to make the deployment and management of storage easy.

  • 3. Perot Systems: In 2009, Dell acquired Perot Systems for $3.9 billion and entered the services and consulting space. Perot laid the foundation for Dell to move away from being just a box pusher and into becoming an IT services company that can compete with HP and IBM--at least for certain markets.

    Dell needed a services company like Perot to move into larger accounts with consulting needs. The purchase followed a trend that saw HP buy EDS for a whopping $13.9 billion to bolster its own services the previous year. Since 2010, Dell's Enterprise Services division has grown from a $5.6 billion division to $8.3 billion, according to the company's most recent 10k.

  • 4. KACE Networks: SME, local government and educational organizations need good systems management but lack the budget to afford enterprise-class products. KACE's management appliances, known as Kboxes, aren't full-blown systems management products like complex frameworks such as HP's Operations Management or IBM's Tivoli, but they address smaller IT shops' more critical needs.

    The Kace Kbox is an appliance-based management product providing functions like device discovery, software distribution, patch management and a service desk. By packaging that up into an easy-to-deploy appliance, Dell serves a critical need in the SME, government and education space.

  • 5. Scalent: Dell sells servers, which gives it a toehold into the data center. The Scalent acquisition furthered Dell's push into the data center by expanding the role of its own Advanced Infrastructure Manager to include the management of VMware ESX, Microsoft's Hyper-V and physical servers. With established vendors like BMC, CA, HP and IBM already offering a broad set of systems management software suites, and Cisco just announcing its Unified Compute System in March 2010, Dell needed to beef up its offerings to stay competitive in the data center. That answer was Scalent.

  • 6. Boomi: It's not all data center and hardware management with Dell. The company saw the writing on the wall with the rapid adoption of SaaS applications by enterprises large and small. The Dell acquisition of Boomi was the company's first pure software play. Unlike Scalent or KACE, which brought much-needed management features to Dell's growing portfolio, Boomi's value add is all about integrating with SaaS services.

    The Boomi acquisition, along with its growing services arm thanks to Perot Systems, brought Dell the capability to integrate customers' data and applications with SaaS services. And since it's service-based, it creates a nice recurring revenue stream along the way.

  • 7. Compellent: While EqualLogic brought Dell into iSCSI storage, Compellent brought Dell a midrange block storage system that supports the other storage protocol, Fibre Channel. The Compellent acquisition eventually led to EMC and Dell parting ways after a 10-year partnership.

    With the loss of EMC as a partner, Dell was lacking for a high-end storage product within its portfolio. Dell lost a bidding war to HP for storage vendor 3Par, which competes against EMC's Symmetrix storage arrays. That may have been for the best. According to storage analyst Howard Marks, "While 3Par was aspirational, it would have helped Dell sell to customers buying Symmetrix. Compellent competes against EMC's Clariion product line, which was the bulk of what Dell was reselling from EMC. "

    Dell doesn't have a storage array to fit the needs of the largest enterprises that need petabytes of storage, but the company has been discussing adding federation to its Compellent storage systems, which could address the need by simultaneously adding resiliency and capacity.

  • 8. Force10: With servers and storage taken care of, Dell turned to networking. Dell had been reselling Juniper and Brocade networking gear but chose Force10 as its entry into data center networking. At the time, Force10 had a good name in the high-end data center and high-performance computing circles, but it had little presence in more traditional data centers and the campus LAN.

    Dell has done little with Force10 other than some branding, but the acquisition is less than a year old. Some analysts thought Brocade would have been a better pick since Dell already had a reseller relationship. A Brocade purchase would have also brought Dell a SAN.

  • 9. SonicWall: SonicWall fits well with Dell's strategy. The purchase brought Dell a strong presence in the SMB/SME space, as well as a full set of security appliances that fit well into larger enterprises. SonicWall's main unified security management products also fit well with Dell's underlying philosophy of being easy to use and low cost. The acquisition also brought a number of standalone security products such as email security appliances, back-up and recovery systems, and centralized management and reporting across the Sonicwall product line.

    We expect Dell to expand on SonicWall's Global Management System (GMS) and integrate it with other parts of Dell's management offerings. In fact, GMS is a pretty robust network element manager with APIs for integration with other systems.