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4/2/2012
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Dell Buys Wyse Technology To Expand Cloud Offerings

Dell to use Wyse's thin client PCs and management software to let enterprises centrally manage client infrastructures.

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8 CEOs Talk Tech Strategy
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Dell on Monday said it reached a deal to acquire Wyse Technology, a privately held provider of cloud computing and desktop virtualization technologies. The deal is the latest in a string of moves by Dell to move beyond its hardware business into management and services offerings.

Financial terms of the deal were not disclosed.

Dell's acquisition of Wyse "enhances our portfolio in the critical area of cloud computing and further supports our efforts to help our customers innovate end-to-end IT solutions from the edge to the core of the cloud," said David Johnson, Dell's senior VP for corporate strategy, during a conference call with reporters and analysts.

Wyse offers thin client PCs and related management software that's designed to let enterprises establish centrally managed client infrastructures. Last month, the company introduced the T10 "zero client" platform, which gives multiple end users access to Microsoft Remote Desktop Services through monitor and keyboard-only configurations.

WYSE is also extending its offerings to support bring-your-own-device technologies, such as tablets and smartphones, as an increasing number of workers turn to non-traditional PCs for business computing.

[ One cloud may not be enough. See 6 Reasons To Use Multiple Cloud Providers. ]

"The total market for desktop virtualization solutions should continue to see strong growth globally, with the larger revenue and margin opportunities coming from the data center infrastructure, cloud, and service offerings that are tied to thin client and desktop virtualization technology sales," said IDC analyst Matt Eastwood, in a research note.

IDC expects enterprise spending on virtual desktops and related technologies to top $15 billion by 2015.

Wyse operates from its headquarters in San Jose, Calif., and it maintains a global network of about 3,000 resellers. Dell said it plans to add Wyse's resellers to its PartnerDirect program. "Our ability to now offer an industry leading cloud-to-client computing solution will provide opportunities for Dell to further accelerate the growth of our server, storage, and network portfolio," said Johnson.

Dell's deal to acquire Wyse is the company's latest move to diversify beyond its PC and server businesses, a campaign that began when Dell, as first reported by InformationWeek, lured Johnson away from IBM in 2009 to oversee a more aggressive acquisitions strategy. Shortly after, Dell announced its $3.9 billion buyout of outsourcer Perot Systems.

Dell in recent months has also completed acquisitions of networking specialist Force10 Networks, as well as security and continuity vendors Secure Works and App Assure. Last month, Dell announced an agreement to buy SonicWall.

SonicWall has traditionally focused on providing security systems for small and midsized businesses, but began pursuing the enterprise market with its introduction of the SuperMassive E10000 series last year. The E10000 systems are designed to monitor traffic across large, corporate networks.

Dell's acquisition of WYSE has been approved by both companies' boards, but remains subject to closing conditions. Dell said it expects to complete the acquisition by the end of its fiscal second quarter, 2013. Dell shares were up 0.04%, to $16.60, in early trading Monday.

The pay-as-you go nature of the cloud makes ROI calculation seem easy. It’s not. Also in the new, all-digital Cloud Calculations InformationWeek supplement: Why infrastructure-as-a-service is a bad deal. (Free registration required.)

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