Dell (s dell) said Monday it had agreed to buy Quest Software in a deal valued at $2.36 billion. The computer maker is buying Quest as it seeks a path away from making cheap hardware to offering services as the IT world changes thanks to virtualization, hyperscale web sites, and the shift in the personal computing market from desktops and laptops to mobile clients.
Quest, of Aliso Viejo, Calif., makes software that helps tie together all the complicated pieces of software that large enterprises run, and it will also give Dell an experience roster of software sales people to help the Round Rock, Texas-based computer company make its transition to software and services. While Quest’s middleware offering may not be as sexy as a big data service or cloud computing software, Dell has actually been working in those areas over the past few years via acquisitions of companies such as Boomi, Wyse, Force10 and Compellent, and partnerships with companies such as Aster Data Systems (s tdc) and Cloudera.
However, Dell had to pay up for Quest, which had entered into an agreement with Insight Partners back in March to sell the company for $23 per share (roughly $2 billion). Dell and Insight then got into a bidding war, with Insight’s latest coming in at $25.75 in mid June. But Dell apparently trumped that with its $28 per share bid, and is walking away with the prize.
With this buy Dell will be able to help tie together the legacy back-end software and databases that enterprises are running and nets 1,500 software sales staff and 1,300 software developers to beef up Dell’s $1.2 billion software business. Quest generated $857 million in global revenue based on its fiscal year 2011 results, and will be one of Dell’s larger purchases.
The transaction is expected to close in Dell’s third fiscal quarter.