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Dell boosts desktop virtualisation with Wyse acquisition

Cliff Saran

Dell is aiming to bolster its desktop virtualisation roadmap with the acquisition of thin client specialist Wyse Technology.

The computer manufacturer said the acquisition would extend its desktop virtualisation capabilities and drive datacentre products and services.

“The Wyse Technology desktop virtualisation capability complements Dell’s strongest-ever device and computing solutions portfolio, and strengthens our position in offering customers among the broadest set of computing choices from the edge to the core to the cloud,” said Jeff Clarke, president, end user computing solutions, at Dell.

Dell is steadily building a portfolio of enterprise products to offer IT departments a compelling alternative to HP and IBM products and services.

Forrester analyst Richard Fichera noted in a blog: “Forrester has talked to several large HP and IBM shops recently which were aware of what Dell was going to offer and, while not ready to switch suppliers now, would be willing to put Dell into serious consideration for future procurements where it would previously have not been a serious contender.”

Expanding the enterprise product portfolio

Reporting the company’s fourth quarter 2012 results in February, Dell's chief financial officer, Brian Gladden, said the company had completed the acquisitions of companies such as SecureWorks, Compellent and Force10 “to enhance our enterprise solutions”.

It its fourth quarter 2012, Dell's Large Enterprise business saw broad-based growth across both the client and enterprise solutions and services. "Our Large Enterprise services revenue increased 18% as we continue to expand our vertical expertise and develop service solutions that are relevant to our customers' business needs,” said Dell president Stephen Felice during the results call.

The results show Dell is growing its enterprise business. In fact, during the announcement of its fourth quarter 2012 results, Dell stated that its server and networking revenue increased by 6% in the quarter, and the Dell-owned IP storage products grew 33% to $463m, mainly due to the Compellent acquisition, which saw over 60% sequential revenue growth.

Buying in virtualisation capabilities

Desktop virtualisation requires back-end datacentre network, storage and server hardware infrastructure. 

“Thin client and desktop virtualisation solutions typically drive high attach rates to datacentre solutions, including servers, networking, storage and services," said Matt Eastwood, group vice-president, enterprise platform research, at IDC. "The end-to-end datacentre infrastructure stack for these solutions is expected to exceed $15bn by 2015.”

Gartner research vice-president Mark Margevicius said Dell now has enough of an enterprise portfolio to compete with HP. “Wyse is important for Dell – it fulfils the portfolio from a hardware perspective,” he said, adding that previously, when a large enterprise was looking for thin clients, Dell lacked suitable products.

Margevicius said much of the value of Wyse comes from its software, such as ThinOS, PocketCloud and Streaming Manager. “The software assets are a differentiator for Wyse,” he said.

In terms of strategy, Margevicius said the Wyse acquisition showed that Dell now has “a complete solution, from the edge to the cloud". 

Thin client computing is a growth business. It may not be as large as the traditional desktop and laptop PC business, but experts agree that Dell looks well placed to offer desktop virtualisation hardware and software.

On top of this, Dell also owns Perot Systems, which means it has the services business to implement VMware and Citrix desktop virtualisation projects.


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