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Dell Sheds Software Assets with Quest Software and SonicWall Deal

Four years ago Dell won a protracted bidding war to acquire Quest Software, which has a wide portfolio of systems management and migration tools, primarily for Microsoft-based environments including Active Directory, SharePoint and Windows. Now Dell is casting aside Quest, along with SonicWall, a supplier of e-mail and content management security appliances.

Private equity firm Francisco Partners and hedge fund operator Elliott Management today said they have agreed to acquire the Dell Software Group's security, systems and information management and data analytics solutions. Terms of the deal were not disclosed but Reuters reports the value to be more than $2 billion. The move comes as Dell is on the cusp of closing its $67 billion deal to acquire storage EMC, the largest merger in the IT industry to date. While Dell isn't saying why it has decided to sell off its Quest tools and SonicWall business, they apparently no longer fit into its strategy to focus on hardware ranging from its PC and devices business and the datacenter with its portfolio of servers, networking and its extended storage and datacenter infrastructure assets that will come from EMC. It also stands to reason Dell could use the cash to finalize the deal. Dell has already shed its consulting business, Perot Systems, and spun off its SecureWorks unit in an initial public offering.

Dell will retain Boomi, the software business that provides integration and connectivity between cloud and on-premises apps along with API and master data management. The Quest software portfolio consists of advanced analytics, database management, data protection, endpoint systems management, identity and access management, Microsoft platform management, network security, and performance monitoring, according to Francisco Partners.

"We see tremendous growth opportunity for these businesses," said Brian Decker, head of security investing at Francisco Partners, in a statement. "Network security and identity and access management are increasingly strategic imperatives for enterprises."

It isn't clear what the operating structure will be for Quest and SonicWall or what the future holds for Dell Software President John Swainson. Dell said further information will come at the closing of the deal, which is subject to usual regulatory approvals.

Posted by Jeffrey Schwartz on 06/20/2016 at 11:32 AM


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