Dell reportedly was in advanced negotiations in late May to buy the software company as part of its transformation into an IT solutions vendor.
Dells bid to buy Quest Software
reportedly has broken down, just more than a week after reports said the two
sides were close to making a deal.
According to reports by Reuters and BloombergBusinessweek, unnamed sources said
talks between the two companies broke down late last week for unknown reasons.
Sources told Reuters that despite the ending of negotiations, lower-level
representatives from both companies are still in touch.
Quest, a 25-year-old company whose
software is designed to help businesses manage database, server and user
workspace, protect and backup data and monitor performance, has been a topic of
conversation for more than two months since executives agreed to be bought by
venture capital firm Insight Venture Partners for $2 billion.
Quest reportedly had been granted a
go shop period since the agreement with Insight, and several analysts said
the software company had gotten interest from several top-tier tech companies,
including Dell, Microsoft, Oracle, CA and BMC Software.
Dell was seen as a logical choice,
given its interest in expanding its reach beyond its core PC- and server-making
businesses and becoming an enterprise IT solutions provider. Softwarealong
with networking and storageplays a key role in that effort, and Dell already
has grabbed other software makers to help build out its portfolio.
Dell this year bought Wyse
Technologya longtime hardware maker that itself was shifting its focus to
cloud software and desktop virtualizationas well as Make Technologies for
application modernization software and Clerity Solutions, which also is in
application modernization.
Quest and Dell also have been strong
partners in the past, with Quest having a page on its Website devoted to the alliance.
According to the software company, the two vendors have worked together since
2004, and Quest has become one of Dells top 10 partners worldwide and Dell is
one of Quests top five.
Our deeply rooted association means
that we frequently collaborate heavily on planning, designing, implementing and
managing hardware and software solutions for our customers to deliver powerful
results, Quest officials say on the Website.
Those shared efforts revolve around
such areas as virtualization management for desktops and servers, various
Microsoft projects, application management for SAP, PeopleSoft and Java, and
database management for Oracle database offerings, SQL Server and MySQL.
Dell executives have been pushing
the transformation of the company for several years, trying to move it into
higher growth areas to protect it against the increased commoditization of PCs
and servers. It hasnt been easy for Dell, as illustrated by
the first three months of this year. In a May 22 conference call with analysts
and journalists, officials reported that first-quarter revenues and profits
came in lower than during the same period in 2011, missing Wall Street
analysts expectations. During the call, Brian Gladden, Dells senior vice
president and CFO, said that despite the financial numbers, the company was
committed to the strategy and that the results of the transformation would not
be linear. ¦ This is a long-term strategy and will take time.
Krista Macomber, an analyst with
Technology Business Research, said in a May 22 research note that the firstquarter
quarterly financial numbers shouldnt throw Dells transformation efforts
off-track.
The enterprise revenue decline is
not yet a significant threat to Dells strategic direction, Macomber wrote.
Considering Dells expansive existing install base and go-to-market know-how
within the midmarket, Dells midmarket customers are adopting its solutions and
services ahead of enterprise sector customers.
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