July 2, 2012 – Dell is formally announcing a $2.4 billion acquisition of IT management software provider Quest Software.

Dell pointed specifically to Quest’s software capabilities in systems management, security, data protection and workplace management as central to the proposed deal. A release from Dell cited complimentary and expanded software for security, database management and application development that Quest could bring to other recent Dell acquisitions such as Clerity Solutions, SonicWALL and Make Technologies.

In a letter to Quest partners, Quest Chairman and CEO Vinny Smith said that his firm’s security and systems management offerings will be a “critical component” of Dell’s software portfolio. In a separate letter to Quest customers, Smith remarked that the base of Quest’s 3,800 employees is expected to join Dell’s team.

In a call with media on the proposed deal, Dell Software President John Swainson says that Quest’s offerings “will be the foundation of solutions going forward” for Round Rock’s five-month-old reorganized software division. The range of software and its capabilities as both off-premise solutions and in migration with other vendors such as Microsoft should provide Dell with quick development of software that enables widespread adoption, Swainson says. Dell executives also noted on the call with media that the deal doesn’t cancel out partnerships with Quest rivals like CommVault, though Dell would focus on sales of its own software and solutions. 

Quest is based in Aliso Viejo, Calif. The vendor was founded in 1987 and counts more than 100,000 customers worldwide.

There had been speculation that a deal was in the works for weeks, with a few suitors circling Quest. At that time, Saugatuck's Bruce Guptill said the deal would fall in line with the trend of mega vendors seeking out application monitoring and management solution providers to boost their own moves in the cloud, mobile and big data markets.

Dell’s cash and debt deal is subject to closing conditions and approval by Quest's shareholders.

In early February, Dell reorganized some of its internal structure, including the formation of a new software group. Dell acquired data and application recovery provider AppAssure weeks after establishing the new software group, though Monday’s official deal was the biggest pitched by Dell since its $820 million buy of Compellent in December 2010. Dell was on the losing side of a billion-dollar bidding war with HP for cloud storage provider 3Par in summer 2010.

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