Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Applications
    • Applications
    • Cloud
    • Cybersecurity
    • Mobile
    • Networking
    • Storage

    Dell Has a Method to Its Acquisition Madness

    By
    Chris Preimesberger
    -
    March 13, 2012
    Share
    Facebook
    Twitter
    Linkedin

      One could describe Dell as acquisition-crazy and not be far off the mark. It has now captured two new companies in three weeks and 13 in the last two years, if you’re keeping score.

      That’s a lot of new-generation IT to uproot and move inside a company firewall. However, Dell has a system on how to do this and is pretty picky about what it acquires. Michael Dell told eWEEK during a visit to Round Rock, Texas, last summer that his company, led by Senior Vice President of Corporate Strategy Dave Johnson, might look at up to 250 companies a year for possible acquisition and will settle on maybe seven or eight.

      So if you’re one of the seven or eight, you’re obviously high on the charts in your sector.

      Of course, Dell’s competitors in the full-service IT products and services business are doing the same thing. EMC, Oracle, Hewlett-Packard and IBM (well, not so much lately) have all gone through similar asset-collecting binges. In fact, EMC may have set a record of sorts in the 2006-2010 time span with 34 companies added to its roster.

      Innovation Happens, but Usually Elsewhere

      The fact is, mammoth companies like these€”even with all the research and development resources they already have in place€”cannot keep up with all sectors in IT evolution. Innovation tends to happen elsewhere, and current standards now morph into something better so quickly that industry leaders have to buy ready-to-use IT and plug it into their existing catalogs.

      This is what Dell did March 13 in picking up SonicWall, a strong SMB-midrange play in the threat management software business. Oh, by the way, SMBs and midrangers are also where Dell is strongest.

      Unified threat management (UTM) is a relatively new product/service category that includes firewall, intrusion prevention, virtual private network, data leak prevention, gateway antivirus, email security, Web security and application control. IDC estimated the UTM market to be worth about $2.4 billion in 2011 and expects it to grow at a 13 percent CAGR (compounded annual growth rate) through 2015.

      Terms of the SonicWall deal were not disclosed, but Wall Street’s Jefferies & Company estimated Dell paid between $1 billion and $1.5 billion in cash. That’s not a trivial check to write, even at today’s inflated rates.

      What Does SonicWall Bring to the Party?

      For a billion bucks and change, what will San Jose, Calif.-based SonicWall bring to Dell that it previously lacked? And does this pretty much do it for Dell and its data center networking security, or are there still some holes to fill?

      “There are always holes to fill,” Forrester Research Principal Analyst of Security and Risk Management John Kindervag told eWEEK. “This gives them a very powerful set of products and services to compete with Cisco Systems, Juniper Networks and HP in the enterprise switching and services business.

      “Prior to this they bought Force 10 (switching), Perot Systems (consulting) and SecureWorks (Managed Security Services). With the acquisition of SonicWall, they have a very fast gateway product that has both firewall and IPS features, which places it squarely in the Next Generation Firewall Market (NGFW). These types of multifunction gateways are foundational to future-state secure network design.”

      Kindervag said SonicWall always made a good product but it had an image problem.

      “It was perceived as a midmarket solution that didn’t resonate well with enterprise-sized organizations,” Kindervag said. “Dell has the marketing savvy and sales force to make SonicWall an enticing choice for a new level of buyers.

      “It also provides new competition for current NGFW leaders such as Palo Alto Networks and Check Point Software€”which can only be a good thing, as increased competition should drive innovation.”

      Will Quest Software Be the Next Acquisition Target?

      Jefferies & Co. had an interesting take on the deal and, in fact, dropped a clue as to who might be Dell’s next acquisition target.

      J&C on the strategic impact of the SonicWall deal: “We believe Dell will be able to leverage its distribution and customer relationships to sell more SonicWall product. We think this adds more tools to Dell’s cloud stack but that a more unified offering is unlikely before CY13.”

      J&C on the implications of the deal regarding Quest Software: “While the size and timing of the SonicWall deal reduces the odds that Dell will make a bid for QSFT, we note that SonicWall’s products do not overlap with Quest’s. We think Dell is likely taking a look at QSFT during the current 60-day shopping period and that the company would fit well with Dell strategically.”

      Hmmm. Quest Software, eh? Sixty-day shopping period? Neither company can talk, of course. Aliso Viejo, Calif.-based Quest makes a lot of popular tools (TOAD, Foglight, NetVault and QuickConnect are the best-known) that Dell could use in its quest (pun intended) to help its customers move to private and hybrid cloud deployments.

      There’s more where all this came from. Keep tuning in.

      Chris Preimesberger is eWEEK’s Editor of Features and Analysis. Twitter: editingwhiz.

      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor Emeritus of eWEEK. In his 16 years and more than 5,000 articles at eWEEK, he distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.

      MOST POPULAR ARTICLES

      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      Applications

      Cisco’s Thimaya Subaiya on Customer Experience in...

      James Maguire - May 10, 2022 0
      I spoke with Thimaya Subaiya, SVP and GM of Global Customer Experience at Cisco, about the factors that create good customer experience – and...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×