Dell to Buy Quest Software for $2.4 Billion

In a move that further diversifies its offerings, Dell announced today that it will acquire Quest Software, a maker of enterprise management software, for $2.4 billion. Under the terms of the deal, Dell will pay Quest shareholders $28 per share. The transaction is expected to close during Dell's third fiscal quarter.

"The addition of Quest will enable Dell to deliver more competitive server, storage, networking, and end user computing solutions and services to customers," said John Swainson, president of Dell Software Group, in a statement. "Quest's suite of industry-leading software products, highly talented team members, and unique intellectual property will position us well in the largest and fastest-growing areas of the software industry."

Already known for its personal computers and laptops, Dell has taken numerous steps to expand its business, particularly through SaaS-based products. In addition to specializing in desktop virtualization and IT management software, Quest Software also specializes in cloud migration software and services.

The company offers a Windows Server Management solution, which helps customers shift from on-premises Microsoft applications to SaaS versions of Exchange, SharePoint, and more. Now that it has acquired Quest Software, Dell can leverage its offerings for moving customers into its own cloud solutions.

In listing the benefits of this acquisition, Dell noted that Quest's Windows Server Management solution will complement its other recent acquisitions, namely Clerity Solutions—a company that helps users move from legacy computing systems into the cloud and other new industry-standard systems—and Make Technologies, also a provider of application modernization software.

Dell is also pursuing small and medium-sized businesses through its cloud offerings. "What we've found is the average SMB's use of SaaS applications has grown from two applications two years ago to now seven applications," says Bill O'dell, senior director of marketing and product management of Dell's Cloud Business Applications division. "The market has fundamentally changed, and that's why we're building Dell Cloud Business Applications."

As part of its Cloud Business Applications, Dell recently partnered with Salesforce.com and Adobe, through which it offers the Salesforce Sales and Service Clouds and Adobe Echosign e-signature solution, respectively. It also offers AppExtremes' Conga Composer eDocument solution and has added additional features to its Boomi solution. Acquired by Dell in 2010, Boomi's software lets companies share data between their cloud and on-premise applications.

Combining its current cloud offerings with marketing automation provider Pardot provides an "end-to-end solution for SMBs," according to O'dell. "By giving our customers that entire portfolio, we are in a good position to come into the SMB market…when customers are looking for a big vendor that they already do business with to help them."

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