Dell is continuing to add to its list of acquisitions with Force 10 Networks as it looks to build out its enterprise solutions strategy.
Dell officials are looking to plug a hole in its portfolio of data center
solutions by buying Force 10 Networks, a move that would shore up the vendor's
which announced the bid for Force 10 July 20, over the past few years has
aggressively expanded its enterprises offerings through both in-house
development and acquisitions of such companies as Perot Systems in services,
EqualLogic and Compellent in storage and Kace
earlier this year for virtualization and systems management.
prior acquisitions complemented Dell's already strong server business, a market
in which the vendor routinely ranks No. 3, behind IBM
and Hewlett-Packard. In recent months, speculation focused around the
possibility of Dell buying a networking vendor to fill the void in that area.
Dell has strong partnerships with the likes of Juniper Networks and
Brocade-rumors have circulated about Dell's interest in buying Brocade-and also
its own line of networking gear, such as its PowerConnect portfolio.
a conference call July 20 with journalists and analysts, Dario Zamarian, vice
president and general manager of Dell Networking, said Force 10's focus on the
data center adds to Dell's PowerConnect offerings, which are aimed more at
is very much complementary, very much a growth story," Zamarian said of the
deal, which has been approved by the boards of directors of each company.
details of the deal were not released.
have said that for Dell to make a leap forward in networking and in its larger
enterprise strategy, an acquisition would be necessary.
is Dell filling out its enterprise portfolio," Roger Kay, principal analyst at
Endpoint Technologies Associates, said in an interview with eWEEK. "Dell has
been building out its strength in storage, and it's always had servers. ... Now
this is networking."
enterprise strategy was the central topic during Dell's annual Analyst Day
event late last month, where CEO
said he views his company as one that can offer a complete
solution for complex problems that IT managers encounter.
focusing a lot on data integration," Dell said during a talk with analysts
at the event. "You have these very complex ideas of running a cloud
application with a legacy application or running two cloud applications
together. How do you handle the integration of those types of
10, a private company with about $200 million in revenues, offers a host of
switches and routers for Gigabit Ethernet and 10GbE environments that are
designed to help drive down power and cooling costs. Along with complementary
multi-service transport and access solutions, Force 10 also offers its Open
Cloud Networking strategy, an open-standards-based initiative that stresses
automation and virtualization to enable customers to migrate their networking
environments into scalable data center and cloud computing fabrics.
to an anonymous source in a Bloomberg
, Dell officials had considered buying Brocade, but opted instead
for Force 10 because its Ethernet capabilities were more advanced than
Brocade's. In the conference call, Brad Anderson, senior vice president of
Dell's Enterprise Solutions Group, said Brocade will continue to be a strong
ally, but that the partnership will change somewhat due to overlaps with Force
10's product portfolio.
called the acquisition of Force 10 "the next logical step" in the company's
transformation into an enterprise solutions provider.
is a very key element in our enterprise growth strategy," he said.
agreed. Dell's acquisition of Force 10 will make it more competitive with the
likes of Cisco Systems and HP, both of which are looking to offer more complete
data center solutions that include servers, storage, networking, virtualization
and management software. The push by Dell and HP essentially was kicked off two
years ago, when Cisco launched its UCS (Unified Computing System), which not
only combined Cisco's networking products with EMC's
storage and VMware's virtualization technologies, but also marked Cisco's entry
into the server market.
move marked Cisco's transformation from a strong partner of HP and other OEMs
into a key competitor. HP countered by buying networking vendor 3Com to build
out its networking capabilities. Dell is following suit.
like Dell and HP had been dependent on Cisco [for networking technology]," Kay
said. "Now they're diversifying."
Enderle, principal analyst at The Enderle Group, said that for Dell, buying a
company like Force 10 makes sense as the vendor looks to compete more closely
with HP and Cisco.
10 is no 3Com and certainly not a Cisco," Enderle said in an email to eWEEK.
"On the other hand, it is a good start and large acquisitions typically
fail. Think of Force 10 as seed corn; it allows Dell to hit the market
running but, assuming this moves like other acquisitions, Dell will grow this
firm rapidly to be a stronger contender and the end result will better
integrate with the Dell family of products sooner because Dell doesn't have to
transition a large company. Their formula works."
10 fits that formula, he said.
likes] firms that have good products but suffer from poor distribution and
sales due to size," Enderle wrote. "Force 10 seems to fit that model. They
like this profile because it creates the best short-term synergy and the result
has been rather impressive growth for some of their other recent acquisitions
at Jefferies & Co. said the Force 10 deal is a good step for Dell, but
there are other moves the vendor needs to make to build out its overall
primarily provides 10 GbE ... switches focused on the data center, filling a
large hole in Dell's cloud stack (especially following HP's acquisition of
3Com)," the analysts said in a research note. "We see the deal as positive, but
we still believe Dell needs a more robust cloud software offering."
the cloud software space, Dell is "significantly behind HP in investing in a
full stack for the cloud with holes primarily in software and networking," they
said. "In recent years, HP has spent $6.7 [billion] on software acquisitions
while Dell has only spent $150 [million]. Without vertical integration Dell
will be dependent on partners that may have differing release and innovation