Dell to Buy Wyse, Grow Cloud, Virtualization Portfolio

UPDATED: Dell is looking to rapidly expand its desktop virtualization capabilities through the acquisition of Wyse, whose focus in recent years has shifted from hardware to software.

Dell is looking to expand its cloud and desktop virtualization capabilities by buying Wyse Technology, a thin-client pioneer that over the past several years has shifted its focus from hardware to software.

Dell officials announced the deal April 2.

Acquiring Wyse will enable Dell to greatly expand its desktop virtualization portfolio and cloud-based client capabilities, according to officials with the world€™s third-largest PC maker. In addition, it also will enable Dell to offer greater integration of cloud client and desktop virtualization capabilities into the company's larger data center server, storage and networking solutions, Dave Johnson, senior vice president of Dell corporate strategy, said during a conference call with analysts and journalists.

€œDesktop virtualization can help organizations streamline IT management, improve productivity and security, and increase cost efficiency for discrete workloads or usage scenarios,€ Jeff Clark, president of end-user computing solutions at Dell, said in a statement. €œThe Wyse Technology desktop virtualization capability complements Dell€™s strongest-ever device and computing solutions portfolio, and strengthens our position in offering customers among the broadest set of computing choices, from the edge to the core to the cloud.€

During the conference call, Clark said that through the deal, Dell will be able to offer businesses the chance to take greater advantage of the benefits that cloud client computing and desktop virtualization offer, including improved security, manageability and cost efficiency around their client implementations. For employees, it will improve productivity, allowing them "to work when, where and how, any way they choose," he said.

Wyse offers a range of client hardware, from thin, zero and cloud PC offerings, as well as a growing portfolio of management, desktop virtualization and cloud software that supports everything from desktops and notebooks to mobile devices, including smartphones and tablets. The 31-year-old company has shipped more than 20 million units throughout the world, according to its Website.

The company€™s focus has shifted in recent years from hardware to software, and for Wyse officials, that software IP has been the key differentiator in a highly competitive desktop virtualization space that includes such top-tier tech players as Microsoft, VMware and Citrix, as well as smaller vendors and startups.

Wyse officials have pointed to such technologies as PocketCloud, which was introduced in 2009 and essentially enables workers using such mobile devices as Apple€™s iPhones, iPads and iPod Touch devices, as well as smartphones and tablets running Google€™s Android mobile operating system, to access the work environments that are on their PCs. It also lets IT administrators gain access to end-user machines through their mobile devices.

PocketCloud, which is offered as an app in Apple€™s App Store and the Android Market, was cited by officials as an example of Wyse€™s software-first strategy.

€œOur story was a hardware story for many, many years,€ Wyse President and CEO Tarkan Maner told eWEEK in an interview in 2010. €œFor the last five or six years, we€™ve been focusing on software. The bottom line is that the differentiator is software. I do not have any hardware engineers in my company.€

In the conference call to discuss the deal, Maner said that through the acquisition, Wyse will be able to grow the reach of its products and technologies.

Dell over the past year has aggressively been ramping up its desktop virtualization capabilities. In announcing the deal, Dell officials cited various Wyse products that will complement what they have been doing, not only with the clients but also the management, virtualization and mobility software. At the same time, Dell officials touted Wyse€™s various cloud computing services.

Dell's Johnson said the company's aim is to leverage what it will inherit through the deal.

"Our intention is to integrate Wyse technology across a broad range of the Dell portfolio," he said.

No financial details of the deal were released. The boards of directors for both Dell and Wyse have approved the deal, which is expected to close in the second half of the year.

NOTE: This story was updated with comments from Dell and Wyse officials from a conference call to discuss the deal.