Quest Software accepts $2.17B Bid what does this Mean for the Channel?

By vmazek
In Cloud
June 20, 2012
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Quest Software Inc. (NASDAQ: QSFT) known for its PacketTrap PSA Software and many other IT software solutions in the channel; accepted a $2.17B bid from private equity company Insight Venture Partners and has added Vector Capital to the buying mix. This comes as a surprise given that Dell Inc. had been vying for the company. Given the nature of Dell’s buying habits, and questions or expectations of what would become of the company once sold to Dell, may have weighed heavily on Quests decision.

So what does this all mean for the channel? I would expect that it will be business as usual for Quest; but this sale may have other Software companies thinking about the potential value of their companies. Considering the breadth of solutions that Quest brings to the table, there are few companies in the channel that could have this type of valuation. However with the very public knowledge that Dell is looking to expand its service based and software solution stack, I would expect that now is a good time to get in line to pitch an offering to them.

If you look at Dell’s current managed service offering which already includes IT Remote Monitoring and Management (RMM), Cloud Services, Backup and Data Solutions, as well as deployment services; a PSA type solution would fit very well into that product line. Though this was not the only product that Dell sought in the Quest deal, it would be one piece that would help to give Dell a complete, service based solution to take to partners.

The hardware industry continues to see huge changes. With mobility and cloud solutions becoming such an integral part of the framework of today’s business, users are becoming less concerned about individual hardware purchases, and more concerned about being able to connect over multi-platform devices. Hardware manufacturers like Dell understand this, and are lining up their offerings to be relevant in the next wave of change in the IT industry.

It will be interesting to see who the next company Dell seeks in its expansion efforts, and if there will be any recognized names from the SMB IT channel. Only time will tell; but we will be keeping an ear close to the ground.


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Author: Frank Gurnee