Dell Cloud Computing Spending Spree Nears $2 Billion


Dell is putting its money where its mouth is when it comes to cloud computing, spending bundles of cash to acquire companies to give it an edge as Dell's cloud computing strategy takes shape.

A recent Dell filing with the U.S. Securities and Exchange Commission (SEC) sheds light onto just how many dollars Dell has dropped to amass a small army of cloud computing companies as Dell hones its cloud computing strategy. The Form 10-K that Dell filed with the SEC indicates that Dell's cloud spending is inching close to the $2 billion mark as Dell and its channel rev their cloud engines.

Dell did not respond to CRN's request for comment by press time.

Dell is no stranger to acquisitions; the Round Rock, Texas-based tech superpower made waves when Dell acquired EqualLogic for $1.4 billion in 2008, a move that officially put Dell's channel plans to bear.

But since the EqualLogic buy, Dell has been setting its sights squarely on the cloud. In early 2011, Dell closed its acquisition for Compellent, a move that gave Dell one of the industry's leading storage virtualization and cloud storage technologies along with a big channel boost. With the Compellent buy, Dell brought aboard more than 2,500 midsize enterprise, large enterprise and cloud customers, along with 450 channel partners worldwide.

Dell went after Compellent after winding up on the losing end of a cut-throat bidding war with HP to acquire storage vendor 3PAR. HP ultimately won the battle for 3PAR with a $2.35 billion bid, ending the contest Dell started with an out-of-the-blue bid of $1.15 billion for 3PAR.

Also this year Dell scooped up SecureWorks, a SaaS and cloud security-as-a-service provider that offers managed security; security and risk consulting; and threat intelligence. Dell said the SecureWorks acquisition would help the company expand its "IT-as-a-service" offerings and give the computer giant a global foothold in the managed security services space. At the time of the SecureWorks buy, neither Dell nor SecureWorks disclosed the financial agreement.

But in the 126-page SEC filing, Dell notes that it spent roughly $938 million on Compellent and $612 million on SecureWorks.

"In February, 2011, Dell completed its acquisitions of Compellent Technologies, Inc. ('Compellent'), a provider of virtual storage solutions for enterprise and cloud computing environments, and SecureWorks Inc. ('SecureWorks'), a global provider of information security service, for approximately $938 million and $612 million, respectively. Both Compellent and SecureWorks will be integrated into Dell's Commercial segments," Dell wrote in the Form 10-K filing with the SEC.

Those two components to Dell's cloud strategy total $1.55 billion. Add to that the five acquisitions Dell made last year, in fiscal 2011, most of which were cloud focused, and Dell's cloud spending spree approaches the $2 billion mark.

NEXT: Dell Cloud Acquisition Tally Rose In Fiscal 2011


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