Dell acquires systems management vendor Kace

Dell acquired security vendor Kace Networks, a systems management appliance company, for an undisclosed amount on Thursday.

The company hopes to expand its system management offering for small- and-medium businesses with the acquisition, Dell said in a statement. Kace offers appliances designed to help accomplish tasks like inventory management, asset management or configuration management, the company said.

Kace's Kbox appliances are also able to improve end-point security through patch management, security-policy enforcement and vulnerability scanning, Dell said.

"The KBOX family of appliances is highly capable, quick to deploy, simple to use and provides a rapid return on investment, exactly the sort of best-value solutions we're delivering to customers," said Steve Felice, president, Dell Consumer and Small and Medium Business, in a statement. Kace's Kbox appliances support operating systems including Windows, Mac and Linux.

Terms of the deal were not disclosed by Dell. The acquisition is subject to closing conditions.

Dell spokesman David Frink declined comment on possible layoffs. But he said Dell expected Kace employees to transition to the Dell team once the acquisition is complete. Kace's operations will continue out of Mountain View, California, which is currently Kace's headquarters, Frink said.

In a note sent to customers on Thursday, Kace Networks CEO Rob Meinhardt wrote that support services and contacts for current Kace customers will remain unchanged.

"Increased investment by Dell in systems management -- including expanding the KACE operation inside Dell -- will put more resources into play to help customers save time and money using Kbox products," Meinhardt wrote. The accelerated development will help Kace's technology expand far faster than before, Meinhardt wrote.

"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," Meinhardt wrote.

Dell has been doing interesting things in the server space, which includes expanding its services and support services that could provide the company incremental revenue, said Charles King, principal analyst with Pund-IT. The services model has worked for competitors including Hewlett-Packard and IBM, and Kace's acquisition helps Dell systematically build its remote management services portfolio.

The server appliances from Kace can help Dell manage systems from a distance so they are not putting undue burden on customers, King said. After initial deployment, the appliances will help Dell tweak servers from a distance. Such support services could be especially appealing to small and medium-size businesses, which look for shorter engagement times to achieve mundane tasks like fixing systems or patch management.

Analyst John Spooner of Technology Business Research agreed, saying the acquisition could give Dell additional revenue and the ability to sell more servers that are easy to deploy.

"With appliances, you’re really selling a package of hardware with ongoing software and services subscriptions. This ...allows Dell to enter into a relationship with customers, under which it provides software updates for each appliance and some type of services support as well," Spooner said.

Dell in recent years has taken a number of steps to improve support and services for small and medium businesses. In 2008 the company ditched its older predefined support model for a more customizable support model. In addition to adding light consulting services on a pay-as-you-go basis, the company also acquired a number of companies in recent years including Everdream and SilverBack to beef up its remote management capabilities.

"I wouldn’t be surprised if Dell acquired additional appliance companies and, as a result, competitors like HP and IBM began to look closely at this market as well," Spooner said.

HP and IBM have historically focused on large-scale managed-services offerings targeted at large enterprises. Dell made a recent push into the space, acquiring services company Perot Systems in November for around $3.9 billion in cash. In December it integrated Perot Systems' operations into a new unit called Dell Services.

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