On Thursday Dell announced that the company would acquire the security vendor Kace Networks, which is a popular systems management program. In buying Kace Dell hopes to "expand its system management offering for small- and medium-sized businesses."[1] Kace specializes in providing security to mid-level businesses and Dell hopes to generate greater return on investment by allowing Kace Networks to expand operations within Dell's company. Dell did not comment on any potential layoffs from the acquisition and plans to keep Kace in tact by continuing operations from the company's headquarters in Mountain View, California. By making this move and keeping Kace's operations separate from their own, Dell hopes to cater to the medium businesses while keeping its customer service relationship high with sustained efficiency.
This was a smart investment for Dell to make, it allows them to build new relationships with more clients in different markets while managing the new wing of the company from a distance. Security issues are ever increasing for every company and the need for more efficient system management is obvious for businesses across the board. Kace's Kbox series gives Dell the ability to automatically update servers and software from a distance giving its clients an easy way to save time and money. Dell will gain an advantage in the smaller markets over other companies like IBM and HP who manufacture similar system management tools for larger companies. Dell will also be able to make Kace's manufacturing much more efficient allowing them to build on the existing relationships that Kace has established with smaller firms. Kace's former CEO Meinhardt said that, "For our customers this translates to increased product development investment, greater international support, and higher levels of support that come with joining forces with one the world’s leading technology companies,"[1] Kace should expect to see rapid development from the merger and its clients should see substantial advances from the move making this beneficial for all parties involved.
This move was clearly aimed at making new relationships with customers for Dell and goes along with the idea that most companies going forward need to find ways to increase customer satisfaction. Not only does the merger coincide with customer service, but also with the growing trend of being consciousness of network security. By making this move Dell is trying to make higher level system management tools available to smaller businesses. This would appeal to the small businesses who need the opportunity to implement new servers and the availability of multiple system management tools without the need of adding new positions or rearranging their operations to maintain the network. The implementation and ease of use for Kace's systems is a big reason that companies choose the Kbox series and will only improve with Dell's funding. "KACE says most of its customers have deployed their KBOX appliances in a week or less, and almost two-thirds said the products paid for themselves in less than three months."[2] If medium size businesses return their investment that quickly it would be hard to imagine that Dell would not gain from this investment in Kace Networks.
Article:[1] http://www.infoworld.com/t/mergers-and-acquisitions/dell-acquires-systems-management-vendor-kace-044
Additional Sources:
[2] http://blogs.zdnet.com/BTL/?p=30687
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I completely agree that this is a great investment for DELL, for it will pay for itself in virtually no time, DELL will be able to enter a new market with a different client base, and continue to stay totally dependent of Kace, for the time being. The acquisition also will rapidly increase the customer service DELL is able to provide, for Kace will be dramatically improved now that it is backed by DELL, ultimately providing better international customer support and more consumer resources across the board. I feel that this acquisition is priceless for DELL, and i believe it was smart keeping the same employees in Kace. Rather than cleaning house, DELL is keeping the people that have been doing things right at Kace, which will only better equip DELL's current employees to learn their appliances and ultimately provide better service to their customers. DELL's acquisition of Alienware proved to be a huge success, and I believe that this one will as well.
ReplyDeleteThe acquisition of Kace sounds like a fantastic idea for Dell because it is a way to cater to a new sector of the market that they were not able to reach before. Expansion like this is always a good idea when successful, which seems like it will be the case. It is especially noteworthy that Dell hasn't committed to any layoffs and is going to continue to run Kace's services through the company's headquarters. This would be a very successful feat to accomplish if the people at Dell manage to do it. In addition, Dell will be able to modify the Kbox software, which is a new investment that seems like it would pay for its own R+D and manufacturing costs through sales and continued added business. In an economy as dire as today's, it's nice to see that some corporations can still make decisions that are beneficial to their expansion as a company.
ReplyDeleteAlthough the implementation of this Kace program may be costly, I believe the end results will outweigh the costs many times over. Dell is a leader in the SRM sector of the technology field and must keep up with the dynamic and innovative changes within the technology environment in which Dell works, in order to sustain a comparative advantage. I believe that Kace will not only help Dell attract new customers, but also help Dell keep increase their number of repeat customers. Overall, implementing Kace should yield positive results and increase revenue for Dell.
ReplyDeleteDell was definitely acting in its best interest by acquiring the security vendor Kace Networks. Since Dell is in the computer sector, it will be able to use Kace products in their computer development. It seems this is a much more cost effective and reliable for Dell since they will be able to make sure Kace technologies are compatible with Dell computers. Moreover, I agree that this acquisition will allow Dell to expand their influence to more markets with the strong possibility of increasing profitability.
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