Dell on Monday said it plans to acquire Quest Software in a $2.4 billion acquisition that will give it a solid suite of application management, security, storage and server applications and instantly make it a serious player in the software industry.
The acquisition comes after weeks of speculation that Red Rock, Texas-based Dell would acquire Quest as a way to beef up its software business.
Once the acquisition closes, Dell will instantly become a major software vendor in the storage, security and management markets. At the same time, Dell plans to integrate Quest's software offerings with current Dell hardware and software to provide wide-ranging solutions, helping move the company from one known mainly for offering commodity products.
[Related: Michael Dell: We're 'Not A PC Company']
Aliso Viejo, Calif.-based Quest offers six categories of software, including database management, data protection, performance monitoring, user workspace management, windows server management, and identity and access management. Those software offerings are used by customers in physical, virtual and cloud environments.
Quest's $857 million software business will be the centerpiece of Dell's recently-formed Software Group. That business, once the acquisition is closed, will be worth a total of about $1.2 billion, Dell executives said.
In addition to the software revenue, Quest also brings over 100,000 customers and over 4,000 channel partners to Dell. There is some overlap in customers and partners, Dell executives said on Monday. The two companies were also competitors in some deals.
The acquisition deal, which is expected to close during Dell's third fiscal quarter, also effectively kills the bid by private equity firm Insight Venture Partners to acquire Quest.
PUBLISHED JULY 2, 2012