Dell Is Changing its Stripes

Dell has been on an acquisition spree. Can it transform itself from a hardware maker into a full-fledged software vendor, too?

Can Dell transform itself from a hardware maker into a full-fledged software vendor, too? Based on its recent shopping spee, it sure is trying.

  • Company: Dell, Inc.
  • Headquarters: Round Rock, Texas
  • Employees: 109,400
  • 2012 Revenue: $62.1 billion
  • CEO: Michael Dell
  • What They Do: Dell gets about two-thirds of its revenue from PCs, laptops and servers. It also sells storage and network gear and has an IT services arm through its acquisition of Perot Systems. It recently made a push into software through several acquisitions, and by planning to buy systems-Amanagement vendor Quest Software.

The Pitch

Dell is in the midst of a turnaround plan to reduce its dependence on PCs and expand into more profitable areas such as software and services. It has moved to acquire more than a half-dozen software firms recently, including cloud-integration vendor Boomi, security vendors SonicWall and SecureWorks, and IT-management specialist Quest Software.

Dell's goal isn't to build an independent software business and compete with Oracle and SAP. Rather, it wants to combine its hardware, software and services into prebuilt packages that it says will make it easier for midsize firms to adopt technologies like data warehousing and virtualization. John Swainson, the former CA Technologies chief brought in to run Dell's software business, says Dell is targeting four areas: security, systems management, business intelligence and applications. For that last one, it will partner with firms like Microsoft and Intuit to offer hosted versions of their applications.

The Catch

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