Is Dell looking to buy it’s way out of PCs?

This quarter has seen Dell buy Wyse Technology, a private company specialising in cloud computing and related technologies.  The move is being seen by market analysts as an indication that Dell is further strengthening its moves to expand from being a computer hardware manufacturer to encompass a wider range of information technology products and services. Given the expertise at Wyse Technology, the newly acquired company, the additions to the Dell portfolio seem likely to involve data management and services.

Wyse Technology established a particular reputation in the market for thin clients, and so the specific value that the acquisition will bring to Dell seems to lie in the potential for further developing the enterprise solutions managed by the company, and also expanding operations in the field of desktop virtualisation and the burgeoning technology of cloud computing. Thin clients generally operate on the basis of a connection to cloud computing resources and frequently do not operate a separate hard drive, meaning that such a client does not save data locally, which brings a number of logistical and security benefits in the design and use of the devices.

The acquisition of Wyse will therefore almost certainly be seen as a move by Dell to beef up its competitive edge over rivals in the cloud computing market. These rivals notably include Microsoft, with whom Dell cooperates to a significant extent in its hardware manufacturing operations.

On the enterprise market, Wyse Technology has been offering a portfolio of services and products that enable enterprises to create and manage their own IT infrastructure centrally, making use of cloud computing know-how. These elements of the portfolio are now open to Dell for expansion and possibly for further innovation, bringing a possibly wider enterprise market into play for Dell as a whole, and enabling Dell to offer a wider selection of services for existing corporate and enterprise customers.

Another aspect of the acquisition is the attention that Wyse Technology has been giving to incorporating devices other than traditional laptop and desktop computers into its product and service range. This means that the new combination of Dell and Wyse offerings can expand the Dell PC base into devices such as smartphones and tablets, which are increasingly popular as mobile computing devices for enterprises, as well as for private users.

Statements to the media by the management of Wyse Technology – which is based in California – make it clear that the operations of the company are also to benefit from the new input by Dell, especially given the size of Dell in terms of both market and resources.  It seems likely that the Wyse product and service offering will continue to be expanded under the Dell umbrella. This should benefit both companies involved in the new deal in terms of integrating the respective existing technologies as complementary aspects in the creation of a wider portfolio of computing services.