Dell buys Quest Software for $2.4B. What does this mean for desktop virtualization & Citrix? (UPDATED) - Brian Madden - BrianMadden.com
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Dell buys Quest Software for $2.4B. What does this mean for desktop virtualization & Citrix? (UPDATED)

Written on Jul 02 2012 21,366 views, 11 comments


by Brian Madden

This article was originally published on May 29 as "Dell is thinking about buying Quest Software." On July 2, Dell announced definitively that this is a done deal, for $2.4b. Now, what do you think?

BusinessWeek is reporting that Dell is in discussions to acquire Quest Software. This is after Quest's "go shop" period where their investors try to find the best deal possible after they announced they were planning to go private.

So, let's assume that this is a real thing and that Dell is trying to buy Quest. Is this good for Dell and the desktop virtualization industry at large? (Obviously Quest does a lot more than desktop virtualization, but since that's what we cover on this site, let's consider it from that angle.)

On the surface, it seems like a fine thing as long as Dell doesn't do anything crazy like tie the Quest software to Dell hardware. (I can't imagine them doing that.) And of course Dell just bought Wyse, so they're already thinking more strategically about desktop and application delivery in general.

Regular readers of this site know that I love vWorkspace and I feel that it's better than Citrix XenDesktop and VMware View in many ways. The challenge for Quest is they've been the third horse in a two-horse race, and whenever I mention vWorkspace to customers, I find that they're not even considering it. So maybe Dell can give vWorkspace the reinforcement they need to be seen as legitimate in this industry?

On the other hand, Dell has been good friends with Citrix and VMware. If they really push vWorkspace hard, how will it affect that relationship?

I also wonder if Dell will be able to take vWorkspace in the strategic direction they need to go. Both VMware and Citrix have wonderful stories around the "post PC" era. They've both outlined their vision for delivering Windows, web, and native apps to multiple devices and form factors. (Check out VMware Horizon and Citrix Cloud Gateway for details.) So while I feel confident that both VMware and Citrix "get it," Quest has yet to show any leadership here at all. (It's even more frustrating that Quest has 90% of the products needed to do this in their portfolio already—they just need something to tie it altogether.) Can Dell be that company? Don't hold your breath.

So is this Dell move brilliant? Or is it an easy win that lets them check the "complete solution" box on their 10-K? Will it even happen? What do you think?

 
 




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Comments

Phil Dalbeck wrote re: Dell is thinking about buying Quest Software. What do you think?
on Tue, May 29 2012 4:55 AM Link To This Comment

I feel the scattered nature of the VDI marketplace holds it back.

Integrating good tools into a single unified, interoperable and coherently supported product lineup is no bad thing - I see Dell moving in this direction with the Wyse and possible Quest acquisitions.

One thing I've noted is that they are only buying tools and vendors that are independent of the hypervisor layer, which is a clever move - let the hypervisor producers fight among themselves and layer a viable, profitable echosystem on top of whichever ones have enough marketshare to be worth supporting. The same could be said the guest OS's running on those virtual machines...

Rick Hebly wrote re: Dell is thinking about buying Quest Software. What do you think?
on Tue, May 29 2012 6:00 AM Link To This Comment

Most of all, time will tell. Brian already pointed out the stretegic motivations, but untill Dell unfolds its true reasons it remains unclear.

It is quite clear indeed dat Quest is unable to make vWorkspace a contender that is always included in the race by invitation, while today they rely on wildcard entires with a product that is essentially no less than others. Why? Could be because the Quest family of products encompassesa a quite scattered set of features in the first place, making it near impossible to fit any product into a coherent strategy. Could alo be because Quest figured vWorkspace was such great technology it was to sell itsself grow independantly, while the truth is that great tech is not a replacement for great marketing.

The question remains, is this strategic for Dell rather than a cash parking lot? Will they continue to invest in innovation? Will they continue the interoperability among all virtualisation and thin computing technologies? My best guess is that is indeed the case. Dell has been moving up the value chain for over a decade, considering they don't even touch the manufacturing process of servers and workstations anymore, so they have no choice but putting a comprehensive strategic blanket over their portfolio. With servers, storage, networking, endpoints and brokerage, they seem to span a great part of the stack.

Justin Doek wrote re: Dell is thinking about buying Quest Software. What do you think?
on Tue, May 29 2012 6:47 AM Link To This Comment

Well if they can integrate wyse, unidesk and vworkspace in the dell vdi play: simplicity (searchvirtualdesktop.techtarget.com/.../Dell-and-HP-churn-out-VDI-hardware-as-thin-client-war-heats-up)

They will have some strong arguments for smaller companies as a 1 stop vdi solution shop.

SillyRabbit wrote re: Dell is thinking about buying Quest Software. What do you think?
on Tue, May 29 2012 8:56 AM Link To This Comment

Dell can “think” all they want. That company has a long history of paralysis by analysis and missing out on wonderful infrastructure management pieces. However, at this time, Quest is fragmented and Dell sees that. 2 more notable points: Global Services Organisations (such as IBM and HP) are NOT doing as well as they would have people believe. Why should Dell think that they can play in this space?

@Phil - You are correct. I may use the term fragmented, but the market is truly scattered and there is/are a plethora of quality management tools out there.

Wearing my analyst hat, I am seeing huge growth in storage (virtualization and scalability) management, but not the same growth in corporate virtual environments. I am wondering if the market is simply still deciding?

Gabe Knuth wrote re: Dell is thinking about buying Quest Software. What do you think?
on Tue, May 29 2012 10:59 AM Link To This Comment

Who knows if they're even interested in vWorkspace, frankly? Quest has so many things, Dell can't possibly be interested in all of them. Or, I should probably say, Dell can't give each product the attention it deserves. Do they really want to be a competitor to Citrix and VMware as well as with HP and Cisco (not to mention all the other companies that Quest competes with?)

Our desktop virt brains take it right to vWorkspace, but I think it goes beyond that.

Stephen Rae wrote re: Dell is thinking about buying Quest Software. What do you think?
on Tue, May 29 2012 11:01 AM Link To This Comment

Quest selling?

This tells me that Quest is giving up and may be getting despirate.

I don't think Quest has enough market share or mind share to make a difference.

Why would Dell want to upset their relationship with Citrix and VMware?

I do not think this would be a wise move for dell......but then again ....what are the details and what is the asking price......what patents does Quest have, etc...?

Tony wrote re: Dell is thinking about buying Quest Software. What do you think?
on Tue, May 29 2012 8:39 PM Link To This Comment

Disclaimer: Dell Employee

I have zero insight to this potential buy but just my opinion as someone in the field working for Dell.

I don't think Dell has any interest in vWorkspace.  HP has Openview, IBM has Tivoli, Dell has....um nothing.  I think its for Spotlight and Foglight or whatever its called now.  Don't see them interested in the vRanger suite either as they acquired AppAssure last month.  The big missing piece from Dell's portfolio is wide range datacenter monitoring, management and alerting tools.  OpenManage is all well and good if you're a 100% Dell shop.  Once you throw a mixed bag of Dell, Cisco, HP and umpteen storage solutions, OpenManage become almost useless.

Jody Wong wrote re: Dell is thinking about buying Quest Software. What do you think?
on Wed, May 30 2012 12:16 PM Link To This Comment

I agree with Gabe.  I think Dell is interested in some of the other products.  I don't want think Dell wants to really compete against Citrix & VMware either.

ToddBenjy wrote re: Dell is thinking about buying Quest Software. What do you think?
on Fri, Jun 1 2012 5:41 PM Link To This Comment

Dell would be crazy to consider to try and take vWorkspace to market  in favor of maintaining their Citrix relationship and existing revenue stream as a reseller. The single digit millions that vWorkspace must generate (let's face it, Quest really screwed that up this year)  won't even put a dent in its Citrix revenue stream. The Quest virtualtion folks are kidding themselves if they think Dell are interested in Quest their tech!

The sad thing is that vWorkspace is a fine product and obviously has some pretty smart engineers behind it - they could certainly teach Rana at Citrix and the rest of her numptys a thing or two about how to architect a product (one console, wow, what a concept!).

Carl Webster wrote re: Dell buys Quest Software for $2.4B. What does this mean for desktop virtualization & Citrix? (UPDATED)
on Mon, Jul 2 2012 9:16 AM Link To This Comment

www.quest.com/.../dell-to-acquire-quest-software-072012-817737.aspx

Doesn't even list Vworkspace, or whatever the new name is, in the list of "things that go well with Dell".

Dan Brinkmann wrote re: Dell buys Quest Software for $2.4B. What does this mean for desktop virtualization & Citrix? (UPDATED)
on Mon, Jul 2 2012 10:05 AM Link To This Comment

I agree with others here, vWorkspace is not why Dell is buying Quest. The Desktop Virtualization market requires intense focus, market leadership, and most importantly...development $$$. I just don't see Dell doing more with vWorkspace than Quest did or suddenly trying be be #1 in something, it's not their style. Their style is "good enough" for less than the competition, which isn't a bad thing. It's going to complicate the VMware and Citrix relationship, but that's nothing new.  They want to sell wide and deep into accounts, this makes it wider.

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