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Summary:

Dell may buy Quest Software in a bid to bolster its overall software management play, according to a Bloomberg report. Quest makes management software and tools that could help Dell to become an enterprise services provider — a long-time goal for the PC maker.

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Dell is in talks to acquire Quest Software in a bid to bolster its overall software management play, according to a Bloomberg report.

Quest makes management software and tools that could help Dell push beyond its PC roots to become a bona fide enterprise services provider — a goal it has pursued with past acquisitions of Force10 Networks, SonicWall and other companies over the past year. Both Quest and its competitor BMC have been the subject of buyout rumors over the years as bigger IT players look to expand their portfolios.

Dell’s earlier acquisitions of storage players EqualLogic and Compellent also filled in important check boxes as Dell keeps pushing beyond its commodity PC roots. There’s good reason for that push: As Dell’s recent earnings showed, there’s precious little margin left in PCs. Dell blamed its bad numbers in part on Apple’s successful iPad franchise. Rampant iPad sales have apparently sucked most of the air out of the PC business.

By bringing Quest’s server and other management tools into the fold, Dell could arm its sales and services personnel with more data center products to sell and implement.  Dell has been trying to position itself as a higher-end services provider — a la rival Hewlett-Packard — since its acquisition three years ago of Perot Systems three years ago. That deal was seen as a response to HP’s buyout of EDS the year before.

Insight Venture Partners bought Quest, of Alisa Viejo, Calif., last March for $2 billion. Dell could not be reached for comment. A Quest representative had no comment.

Whether this deal pans out or not, it seems clear that the M&A binge will continue among large IT vendors wanting to consolidate and expand their footprint in corporate data centers.

  1. If Dell doesn’t buy Quest, and CA does, or even if CA doesn’t – given the guys now in charge at Dell Software I’m praying to God that Dell buys CA and puts it out of its misery. CA must be hurting now that John S, Don F, and likely a host of others Sr/Pr Techies are off to, or currently at, Dell.

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