Dell is shedding most of its software assets as it works on closing up its historic, $67 billion merger with EMC, and as with many deals lately, the acquirers are private-equity firms. Here are the key details from a press release issued by Elliott Management and Francisco Partners:
The agreement bolsters Francisco Partners and Elliott Management’s technology portfolios with the addition of Dell Software’s diverse combination of security, systems and information management, and data analytics solutions.
Dell Software’s comprehensive portfolio of solutions span a number of areas critical to the modern business and IT management landscape, including advanced analytics, database management, data protection, endpoint systems management, identity and access management, Microsoft platform management, network security, and performance monitoring.
We’re proud to have built a robust portfolio of software solutions that help make the lives of customers easier,” said John Swainson, president, Dell Software. “Whether they’re managing applications and data, securing their networks, protecting critical information, or deriving key insights from data, customers across the globe have come to rely on Dell Software for top-flight products, service and support. We look forward to continuing that focus as part of the Francisco Partners and Elliott Management portfolio of companies.”
Noticeably absent from the release was mention of Boomi, Dell's cloud-based application integration service, which will be remaining with the company. Terms of the deal were not disclosed, but Reuters put the price tag north of $2 billion, citing three people familiar with the situation.
Analysis: Dell Is Cleaning House
Basically, Dell is paring down assets it doesn't believe it needs post-merger, as well as raising cash to help close the EMC deal. In March, it announced plans to sell off its services unit to NTT Data for more than $3 billion.
Customers therefore need to be realistic, says Constellation Research founder and CEO R "Ray" Wang. "Dell is focused on maximizing assets for Dell," he says. "The EMC merger is really about finding assets to pay for independence while also keeping the recurring assets that tie back to Dell's future strategy. Bottom line—customers should know that Dell is focused on Dell."
The software group was built out through a string of more than 30 acquisitions. While the investment firms' announcement suggested the software group will continue operating as usual, that's not too likely, says Constellation Research VP and principal analyst Doug Henschen. "My guess is that bits and pieces will be sold off to plug holes in the portfolios of larger software vendors," he says. For example, "with analytics being such a priority, I have to believe that Statistica will find a new home."
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