Dell acquires Wyse for thin client, desktop virtualization

Dell acquired Wyse to bolster its desktop virtualization and thin client offerings. Wyse's cloud software could also help Dell gain cloud momentum.

Dell acquired thin client computing vendor Wyse on Monday following a deal with cloud virtual desktop provider Desktone, giving the PC maker a foot in the door to VDI and Desktop as a Service shops.

More on Dell/Wyse acquisition:

How Dell's Wyse acquisition transforms VDI thin client market

Wyse Technology, Inc. offers thin clients and zero clients that integrate into any existing infrastructure. The San Jose, Calif.-based company also provides software for remote device management, cloud connectivity for mobile devices (PocketCloud) and software for use with desktop virtualization products from Microsoft Corp., Citrix Systems, Inc. and VMware, Inc.

Financial terms of the deal were not disclosed. The transaction is expected to close in the second quarter of Dell's fiscal year 2013.

Wyse has a significant client hardware customer base, and some of those customers have reservations about this acquisition.

One such customer is Joe Steele, director of IT for Atlanta-based law firm Weissman, Nowack, Curry & Wilco, who uses Wyse thin clients to virtualize desktops for 50% of the firm's employees.

He's concerned that Dell could cut corners on some of Wyse's thin client hardware and not offer capabilities he has come to depend on, such as Teradici PCoIP in Wyse's P20 thin clients. Regardless, he said, assuming the acquisition is handled appropriately, he sees no reason why it couldn't be positive overall.

Dell competes with HP, moves to cloud

Together with Dell's other recent acquisitions, this one will help the company diversify its enterprise offerings to better compete with Hewlett-Packard, experts say.

The Wyse acquisition follows the company's purchase of backup software firm AppAssure Software Inc. earlier this year and comes a few weeks after Dell's acquisition of network security company SonicWALL.

Experts say this acquisition was a long time coming.

"Dell had some customers that were upset they didn't have a thin client of their own. I'm surprised they haven't been more aggressive in this area until now," said Mark Margevicius, a client computing analyst at Gartner, Inc. "The other part of this deal is Dell has been making a lot of noise about its ability to provision services wherever the cloud may be. Wyse is pretty strong in that regard with its software."

More on Desktop as a Service:

Weighing cloud-hosted virtual desktops vs. VDI

Cloud-based virtual desktops can cut costs, complexity

Cloud-based apps, DaaS eat into VDI usage

In a blog post about the Wyse acquisition, Dell's Jeff Clarke, president of end user computing, said the move does more than just strengthen the company's desktop virtualization offering.

"It holds just as much promise for our data center and enterprise businesses," Clarke wrote. "A desktop virtualization instance often includes a significant sales drag of data center technologies such as server, networking and storage, and complemented by deployment and implementation services."

The move also builds Dell's momentum toward cloud and Desktop as a Service (DaaS), Margevicius said. Last week, Dell announced a partnership with Chelmsford, Mass.-based Desktone, Inc. to provide cloud-hosted virtual desktops.

The combination of Wyse and Desktone allows Dell to "control the access end point, display protocol software and cloud-hosted platform," said Peter McKay, CEO of Desktone. This will give Dell an advantage in terms of cost and reducing complexity.

"This acquisition clearly validates that cloud-hosted desktops are the future of desktop virtualization," McKay said.

Wyse's PocketCloud software, which allows end users to access a virtual desktop on an Apple iOS device, is regarded as one of the best mobile client offerings, Margevicius said. Despite the positives, Wyse isn't viewed as an OEM and may have been shut out of some deals, he said, which could be why Wyse agreed to an acquisition.

Wyse has experienced tremendous growth during the last 30 years. Wyse was the leading thin client vendor for many years but has been neck-and-neck with HP in recent years, in terms of percentage of the client market, Margevicius said.

Wyse and Dell did not respond for comment.

Let us know what you think about the story; email James Furbush or follow @slyoysteron Twitter.

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