Dell Cloud Computing Spending Spree Nears $2 Billion

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In fiscal 2011, Dell captured KACE, a systems management appliance company; Dell picked up Ocarina Networks, a provider of de-duplication solutions and content aware compression across storage product lines; Dell snapped up Scalent, a provider of scalable and efficient data center infrastructure software; Dell bought Boomi, an on-demand integration technology; and Dell purchased InSite One, a cloud-based medical data archiving, storage and disaster recovery play for health care.

Among those five acquisitions, three of them -- Scalent, Boomi and InSite One -- add to Dell's growing arsenal of cloud companies as cloud computing became a central focus for Dell in 2010 and into this year.

Scalent added virtualization capabilities to Dell's data center management solution through Scalent's software capabilities, which include the ability to rapidly provision new servers, rapidly deploy virtualization technology from any number of vendors, provide automatic high availability for servers and build cloud infrastructures.

The Boomi buy gave Dell more SaaS integration and cloud muscle by giving Dell an application integration service play to enable VARs and end users to move data and applications between cloud and on-premise systems.

And InSite One pushes Dell's cloud healthcare strategy forward by adding cloud-based medical archiving that helps health care organizations ease keeping data. The InSite One acquisition gave Dell a storage-as-a-service platform to archive digital content for companies in other industries on a subscription or pay-as-you-go basis. The platform provides healthcare customers a secure, scalable, cloud-based, unified medical archive solution that supports HIPAA compliance and eliminates the silos of image information created when hospitals use multiple PACS. It also combines vendor-neutral archive software with object-based storage to simplify archiving and by moving archiving to the cloud; hospitals can further reduce the overall cost of data storage and retention.

Dell's SEC filing didn't break down the specific cost of each company, but all told Dell's five fiscal 2011 acquisitions totaled $413 million.

"Dell completed five acquisitions during Fiscal 2011, Kace Networks, Inc. ('KACE'), Ocarina Networks Inc. ('Ocarina'), Scalent Systems Inc. ('Scalent'), Boomi, Inc. ('Boomi'), and InSite One, Inc., ('InSite'), for a total purchase consideration of approximately $413 million," the filing notes.

Adding that $413 million to Dell's $1.55 billion spending on Compellent and SecureWorks brings Dell's total spend to just under $2 billion, or $1.963 billion, most of which will directly contribute to Dell's cloud focus.

Additionally, Dell had begun eyeing cloud companies prior to 2010. In December 2007 Dell acquired Everdream, a provider of SaaS and cloud solutions for remote-service management, Dell extended remote management of servers, storage, printers, and the like to desktops, notebooks and other end-user devices globally. And in February 2008, Dell nabbed MessageOne, a cloud e-mail management, compliance and archiving solution for which Dell spent $155 million and tied into its E-mail Management Services (EMS) portfolio.


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