Dell Acquiring MessageOne

Updated: The move will add to Dell's growing collection of services for its enterprise customers.

Dell is adding to its growing enterprise services portfolio and announced Feb. 12 that the company is acquiring MessageOne, which provides managed services for e-mail management, archiving and business continuity.

Dell announced that it would acquire MessageOne, which is based in Austin, Texas, for $155 million in cash. The company is owned by Adam Dell, the brother of Michael Dell.

Since returning to the CEO post in 2007, Michael Dell has looked to expand Dell's list of services for its enterprise customers, an area where the company had lagged behind such industry heavyweights as Hewlett-Packard and IBM.

Dell has added to its portfolio mostly through acquisitions of smaller companies. For example, in November Dell purchased Everdream, another SAAS (software as a service) provider that offers remote server management tools.

With MessageOne, Dell is adding a provider of a number of services to help manage a company's e-mail, including archiving, disaster recovery, compliance and long-term storage of e-mail. In addition to enterprise, the acquisition will allow Dell to offer managed services to SMBs (small and midsized businesses), which lack the IT resources to manage employee e-mail.

"MessageOne's offerings add key capabilities to our growing SAAS-enabled services portfolio for the most critical application to businesses of any size - e-mail," Steve Schuckenbrock, president of Dell Global Services, said in a statement. "MessageOne's services not only meet the needs of large companies... but can also scale down cost effectively to meet the needs of small and medium business customers."

While Dell has been building up its services division for some time, the company also appears to have seen the SAAS market, especially information management, growing in importance in recent months and felt now was the time to become more involved, said Stephanie Balaouras, principal analyst with Forrester Research.

In just the past few months, companies such as Iron Mountain have begun to build out their SAAS offerings, while Seagate, EMC and IBM have purchased smaller companies to help boost their own portfolios.

"Dell didn't want to be left behind in this new market place," Balaouras told eWEEK. "Right now, you have a market that is starting to mature around information management, online backup, achieving and advanced recovery services."

Balaouras believes that Dell is looking to create a SAAS portfolio that appeals mostly to enterprise customers, although midmarket remains a possibility, which offers a wide range of services and one-stop shopping for buyers. Balaouras does not believe that Dell's acquisition of MessageOne is a counter to Google's hosted e-mail services, which target the very low end of the SMB market.

"Dell has always done well in the SMB market and I think this acquisition helps in the enterprise market and gives them a slightly higher-end offering, which looks to be the first of many SAAS offerings," said Balaouras. "Dell is targeting people [who] want a portfolio of offerings and not just looking for a one-off provider."

The boards of both companies have accepted the deal, although Dell, which is headquartered in Round Rock, Texas, did not give a specific time frame for when the MessageOne acquisition will be finalized.

Since MessageOne is owned by Adam Dell and other members of the Dell family were active in the partnerships that controlled the company, Michael Dell was "excluded from negotiating acquisition terms and from all aspects of the decision-making process," according to a statement.