Dell remains in negotiations to potentially sell SonicWall, Quest Software and perhaps even other assets, according to TheStreet.com. The long-rumored negotiations apparently involve multiple private equity firms that want to push deeper into IT security, virtualization and IT management software. But chatter about such moves could ultimately ruffle a few feathers within Dell's channel partner base.
> Update June 20, 2016: Dell Sale of SonicWall, Quest Software? Announcement Could Come This Week
It's no secret that Dell is attempting to raise cash and strengthen its balance sheet before completing the EMC Corp. takeover. That $67 billion buyout is expected to close later this year. Dell has already sold off its IT services business (the former Perot Systems) to NTT Data.
Dell Selling SonicWall, Quest Software?
Selling off SonicWall and Quest Software could be the next moves. According to The Street.com:
"In addition to the services sale, the company is already in talks to sell its Quest Software Inc. corporate software maker, which competes with EMC's VMware, as well as SonicWall cybersecurity unit.
Both are expected to fetch $2 billion--Dell paid $2.4 billion for Quest and $1.2 billion for SonicWall in 2012. Private equity firms Kohlberg Kravis Roberts & Co. LP (KKR) , Thoma Bravo LLC and Vista Equity Partners LLC have reportedly joined the Goldman Sachs Group Inc.-led auctions for the companies."
Potential Dell Asset Sales: Careful of the Spin
Despite the report, I don't quite agree with The Street.com's spin on the situation.
- My view: Quest Software barely competes with VMware, and is much more focused on overall IT management solutions. The bigger challenge: Quest was born during the age of traditional software licenses rather than cloud-based management tools and subscription services. Rather than working through a business model transition, I believe Dell may be willing to part with Quest Software if the price is right.
- TheStreet.com also suggests that EMC may sell its RSA Security unit -- "which directly competes with Dell's own Secureworks." My view: Here again, I disagree with the spin. RSA and Secureworks focus on different segments of IT security. A potential RSA sale is more about exiting a slow-growth business. And rumors about an RSA asset sale certainly aren't new.
TheStreet.com also speculated about additional assets sales -- potentially including EMC's Documentum (speculation has been around for weeks), Dell Compellent and EqualLogic (that sounds like pure speculation to me, considering Michael Dell has mentioned the Compellent and EqualLogic businesses by name in recent strategy briefings with the media).
Dell did not comment on the report.
Dell Channel Partner Strategy
Amid all that asset sale speculation, Dell's channel management team remains focused on partner engagements. And channel partners have been leaning on Dell amid their transformations into vertical market MSPs, according to ChannelE2E research that we'll unveil on June 16.
Overall, Dell has had one of the most consistent channel management teams in recent years -- though some SonicWall executives have moved on to StorageCraft, among other companies. And on again/off again chatter about the SonicWall/Quest Software assets sales surely doesn't inspire confidence in Dell's partner base.
