Dell Gets More Than Thin Clients in Wyse Acquisition

By Chris Preimesberger  |  Posted 2012-04-02 Print this article Print

NEWS ANALYSIS: The deal for venerable thin-client and VDI provider enables Dell to add a new portfolio of cloud-system software and to backfill on other necessary pieces of IT.

Dell is now officially a Big Tent: a benevolent sponsor of new IT acts that sells a lot of tickets in its traveling circus.

The latest headliner for the center ring in Round Rock, Texas, is 31-year-old IT industry survivor Wyse Technology, which was born in 1981 during the Reagan Administration, when new companies still used "Technology" as part of their names.

Dell announced the deal April 2 but declined to say how much it will pay for the San Jose, Calif.-based purveyor of thin-client, virtual desktop and cloud management software. However, if one does the math on Wyse's $375 million in annual revenue, then it's a safe bet that the deal will set Dell back for a cash amount in the $400 million to $600 million range. That price represents 1.0 to 1.5 times Wyse's expected annual revenue, according to Sterne Agee industry analyst Shaw Wu.

Wyse Has Wised Up to IT Trend

For years, Wyse made "dumb terminal"-type hardware/software systems for large enterprises: desktop computers that were tethered only to internal corporate systems. It no longer makes and sells hardware. But in the last half-dozen years, Wyse has become wise to a significant trend in enterprise IT: hardware companies shifting focus to software and cloud management tools.

It's probably not a coincidence that Dell has gone the same route in almost the exact same time window. At the user level, it's true that Dell still makes plenty of personal computers, but it is rapidly putting more emphasis on what it really wants to provide in the 21st century: cloud management software, other types of data center software and corresponding services for all of the above.

Dell, founded by CEO Michael Dell in 1984, is only three years younger than Wyse, so they both came out of the same IT thought generation. There's something to be said about common cultures fitting well together here, too.

A key qualifier for the Big Tent label: Dell appears in a hurry to out-buy fellow Big Tents Hewlett-Packard, IBM, EMC, Oracle and Cisco Systems. At last count, Dell has bought 14 companies in the last two years and three in the last two months. The employee on-boarding process in Round Rock must be as fast-moving as an in-memory database, because if it isn't, those HR folks must be tearing their hair out.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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