Dell Entering IT Game
Mary is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Dell (NASDAQ: DELL) is widely known for its PCs. However, Dell provides a diverse range of products and services for its customers. Dell provides computing hardware and software for consumers, small and large businesses, and the government. Dell prides itself on the built-to-order facet of its computers. However, the manufacturer has had a hard time competing with brands such as Hewlett-Packard (NYSE: HPQ). In addition to personal computers and accessories, HP is also very well known for its enterprise solutions. HP operates in over 170 countries around the world and is the world’s largest IT company.
However, Dell recently announced that it will be purchasing Quest Software (NASDAQ: QSFT) at around $28 per share, or $2.4 billion. Earlier this year, private equity firms Insight Venture Partners and Vector Capital bid $25.75 per share for the company. Dell outbid the private equity firms and believes firmly that Quest’s software offerings are in line with their software strategy, making the investment worthwhile. The deal is expected to close in Dell’s fiscal third quarter.
Quest is a global software company that creates simple-to-use, innovative IT management software that saves time and money across physical, virtual, and cloud environments. The company boasts more than 100,000 worldwide customers. Quest currently operates out of more than 60 offices in 23 countries. Their products and solutions include database management, data protection, performance monitoring, user workspace management, Windows server management, and identity and access management.
Dell’s acquisition of Quest might provide a better competitive advantage as far as gaining market share in the enterprise crowd from HP. The combination of Dell’s hardware and Quest’s software appears to be a solid solution for Dell’s quest to stay competitive in the industry. The addition of Quest’s software to the portfolio will just bring Dell further into the IT sector. As long as the integration goes smoothly, Quest’s software means great things for Dell. Once this deal closes we should expect to see rather large increases in Dell’s revenue and customer base, increasing profits in turn.
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