Dell to buy Wyse Technology

Shoots for thin-client domination.

Dell has revealed plans to buy thin client and desktop virtualisation maker Wyse for an undisclosed sum.

The vendor said that Wyse's products would beef up its existing desktop virtualisation portfolio.

Dell also sees the buy as a lead-in to sell more servers, switches and storage to underpin desktop virtualisation projects. 

“Thin client and desktop virtualisation solutions typically drive high attach rates to data center solutions, including servers, networking, storage and services,” IDC enterprise platform research group VP Matt Eastwood said.

“The end-to-end datacentre infrastructure stack for these solutions is expected to exceed US$15 billion by 2015.”

Purchase price estimates for Wyse varied wildly.

Citing a Stern Agee advisory, ZDNet reported that Dell had paid in the region of US$400 to US$600 million for Wyse. BusinessWeek put the figure at closer to US$1 billion, citing a source.

Privately held Wyse has shipped about 20 million thin client terminals and several key patents around thin-client computing.

It also boasts a network of some 3000 reseller partners – an area of significant focus for Dell’s enterprise ambitions.

Wyse counts Avis Australia, Flight Centre, Mitsubishi Motors, the Victorian Electoral Commission, McKesson Asia Pacific, Hurstville City Council and several schools among its Australian customer base.

Some financials for the deal are expected to be disclosed in Dell's Fiscal Year 2013 results.

Dell and Wyse share strategic alliances with other vendors, including VMware, Microsoft and Citrix.

Dell has an existing Desktop Virtualisation Solutions (DDVS) appliance or managed service that it can bundle with thin client hardware and third-party software such as Citrix XenDesk and VMware's virtual desktop software.

Analyst takes

Forrester analyst Michael Barnes told iTnews that the acquisition was a "clear indication of Dell trying to stay ahead of the industry trend from a PC-centric world to a client-centric world where the client is essentially any device, and likely not a PC.

"It's really Dell trying to hedge its bets away from the PC-centric era which really is coming to an end," Barnes said.

Barnes said the buyout would not impact Dell's existing virtual desktop alliances.

"The Wyse technology doesn't replace the need for some of those players," he said.

"What I think is more interesting is some of the other Wyse partnerships with folks like Cisco. That becomes interesting to watch."

IDC Australia's infrastructure group research manager Trevor Clarke told iTnews that the Wyse buy would help Dell "extend their device ecosystem to a possible area of growth".

However, he noted that some organisations were "re-purposing fat clients and not procuring thin clients" for virtual desktop deployments.