IT Jobs
Dell to buy company from CEO's brother
SaaS vendor acquisition run through board.
By Techworld staff
Published: 11:22 GMT, 13 February 08
Dell has announced plans to buy out MessageOne, founded by CEO Michael Dell’s brother Adam, for about $155 million in cash.
MessageOne hosts software to help companies manage, store and recover enterprise-level email.
"[Monday's] BlackBerry outage is a pretty good example of [the risks] Dell and other customers face for email archiving and continuity," said Dell spokeswoman Lynn Cranford, who noted that the deal is expected to close in 30 to 45 days. "We think email is one of the killer applications and MessageOne is a perfect fit for our suite of software services."
Cranford noted that once the deal closes, MessageOne "will be absorbed" into Dell Global Services. The MessageOne hosted services also will be available to Dell's partner channels.
Existing MessageOne customers should not be affected, she added. The same goes for existing MessageOne partners, many of whom provide MessageOne's hosted offerings as resellers.
In a statement, Dell chief financial officer and vice chairman Don Carty noted that because Adam Dell and Michael Dell are brothers, there were "related-party interests" that required a series of steps to ensure that the transaction was considered objectively. According to the company, Michael Dell was excluded from negotiating acquisition terms and from all aspects of the decision-making process, and "independent members of Dell's board" analysed the deal.
Stephanie Balaouras, an analyst at Forrester Research, called MessageOne a "good cornerstone" to support Dell's software-as-a-service (SaaS) strategy. She said the hosted offerings from large systems and storage vendors, such as Dell, EMC, IBM, Seagate Technology LLC and Iron Mountain, may cause corporate customers to re-evaluate their existing physical storage infrastructure investments.
"Anybody who is re-evaluating their backup investments or [email] archiving, or security around disaster recovery, I think you have to consider SaaS as an alternative now," said Balaouras. "With a lot of these large vendors behind these types of services offerings, you'll see a broader swatch of [enterprises] feel more comfortable with SaaS."
Balaouras did caution that Dell must work to overcome two major issues hampering SaaS adoption: concerns surrounding security and customer support.
She said Dell's purchase of MessageOne, coming on the heels of its acquisition of EqualLogic in November, may signal that the manufacturer is looking to build its own storage brand and "outgrow" its reliance on reselling EMC hardware. "It's almost like on numerous fronts, [Dell] is competing with EMC more directly. Clearly, they want to do their own thing," remarked Balaouras.
Original reporting by Sharon Gaudin and Brian Fonseca of Computerworld (US).
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