Dell To Be a Serious Cloud Player With Quest in Tow

Now that IT management software provider Quest Software has agreed to sell to Dell Inc., industry and channel players are abuzz with talk of the deal’s implications.

Soon Dell will be able to compete head-on in the cloud, against the likes of its partner VMWare, and pursue enterprise data center management, among other possibilities. The new division is to be called Dell Software. That unit will prove “significant” to Dell as it continues to build its enterprise credibility in the transition from commodity hardware manufacturer to trusted adviser, Technology Business Research Inc. (TBR) analysts wrote in a client memo on Friday.  

Adding Quest to the Dell portfolio further validates the computer maker’s IT management goals, wrote Krista Macomber and Stuart Williams. With databases, applications and virtualizations, the idea will be save customers headaches on their IT configuration.

“Quest adds a core software sales organization, enhanced engineering expertise and an expansive enterprise customer base globally to Dell,” TBR analysts said.

In a July 6 article for Forbes Magazine, Forrester Research’s Glenn O’Donnell had a similar take. He further noted that performance monitoring comprises “one of the crown jewels at Quest.” That capability accounts for nearly half of Quest’s revenue and those kinds of apps will be key to Dell’s cloud and service automation, he said.

The drawback to all of this is that Dell now will compete directly with VMware and Microsoft, which are its partners. But the situation is inevitable, O’Donnell said.

“All vendors are being pulled into the same comprehensive set of capabilities. More even bigger M&A activity is likely in the near future as these dynamics play out.”

Earlier this week, Dell agreed to pay $2.4 billion for Quest. INdustry rumor has spread for about three months that a Dell-Quest pairing was in the works, even as private equity firm Insight Ventures Partners said in March it would buy Quest for $2 billion. That agreement, however, included a shopping clause in which Quest could seek a buyer with a higher price.

Both Dell and Quest run channel programs.

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