Dell to acquire thin-client king Wyse Technology

After staking its claim to the cloud marketplace, Dell Inc. (NASDAQ: DELL) has turned its attention to thin client computing, with the planned acquisition of Wyse Technology.

The financial terms of the deal were not disclosed. It’s expected Dell will disclose the acquisition price during the second quarter of its fiscal 2013, when the deal is expected to close.

Dell plans to integrate the Wyse cloud client technology portfolio into its own to offer an end-to-end solution package. The deal also comes with 3,000 Wyse channel partners. According to Wyse president and CEO, Tarkan Maner, there is little overlap between Dell’s channel base and Wyse. “I’ve been getting calls, texts and messages from channel partners this morning and they’re excited for the new opportunity because many of them don’t distribute Dell,” Maner said.

Wyse is a leader in a relatively new category of cloud client computing, and earned just over $375 million in revenue last year. It has about 500 employees, of which 150 are in research and development. The Wyse business is also made up of 250 sales specialists, but the majority of its sales are through its channel partners.

Maner and Dell’s channel team will be spending the next few months figuring out the right certification programs for partners. Maner said Wyse have its own and Dell’s PartnerDirect program has there. “We’ll go through those discussions to integrate them in the next few months,” he added.

Wyse channel partner Thin Desk Inc. of Toronto was monitoring the news from Dell, and company general manager Tyler Haraldsen said he views the deal as a positive one. He said Thin Desk, which isn’t a Dell partner today, will be looking to work more closely with Dell.

Thin Desk made a strategic decision to offer a competitive solution of HP with Neoware, but Haraldsen welcomes having another option with Dell/Wyse. “As the market matures, its good to have an alternative for HP/Neoware with Dell/Wyse for SMB customers at the desktop level connected to the data centre. As customers move to thin clients as desktops die having a Dell solution and an HP solution — both are top leaders — is a nice option for customers,” Haraldsen said.

Wyse’s current product portfolio includes both thin and so-called zero clients. Recently, Wyse released the ARM-powered T10, a pint-sized virtual machine that includes software from Microsoft, Citrix and VMware.

Jeff Clarke, president of Dell End User Computing, told CDN that Dell has relied on channel partner intellectual property (IP) solutions to address the growing market of thin client computing. With Wyse, Dell will be moving into a more profitable Dell-owned IP solution.

Clarke wouldn’t discuss the margin potential of Wyse technology but did say that for ever dollar spent, there’s five dollars worth of servers, storage and networking services needed to manage the new infrastructure.

“In general Dell-owned IP for end-to-end solutions will yield accretive margins with the ability to sell servers, storage and management services. It gives us an advantage in the cloud client stack. We know have the ability to sell this as an end-to-end solution and as we move forward it will be seen as valuable to customers because of its security and that it can lower the total cost of ownership of many devices,” Clarke said.

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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