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Dell To Become Major Software Vendor With $2.4B Deal To Acquire Quest

Dell has ended weeks of speculation by signing a $2.4 billion deal to acquire Quest Software, a move that will give Dell a large portfolio of storage, security, and management software and help turn Dell into a provider of complete SMB and enterprise solutions.

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

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