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"This is a marathon, not a sprint. But it's a safer strategy with better potential than doing big bang acquisitions. But it does take time," Eastwood said. "Think IBM over the past 20 years or EMC over the past 10 years versus what HP tried to do with EDS and Autonomy."
PC demand is also falling off much faster than Dell can make up for with the enterprise infrastructure and software segment, Eastwood said.
"The recent and sudden drop in PC demand caught many by surprise. If demand stays this soft, Dell could face a call to split the company because their enterprise assets are clearly being undervalued on Wall Street," Eastwood said.
But Dell is determined to retain its PC business to deliver a full portfolio of client and server products. Moving away from low-cost PCs, its focus now is on higher-priced computers like the XPS desktops and laptops that can deliver better margins. Homegrown smartphone sales have been scrapped in favor of higher-priced tablets like the $499 XPS 10 and $649 Latitude 10 that can be used at work and play. The burgeoning bring-your-own-device usage model is seen by Dell as key to selling more client products to enterprises, and it hopes Wyse will play a big role in that in the future.
But the biggest question revolves around Quest Software. It was acquired for $2.4 billion and is the centerpiece of Dell's wide-ranging software strategy, which was put into play this year, noted Charles King, principal analyst at Pund-IT.
Dell isn't a big software company and King said that rounding up Dell's existing software assets around Quest could take a while. Dell hopes to unify software tools from acquired companies like Wyse, Kace, SecureWorks, SonicWall, AppAssure, Scalent, Make Technologies, Clerity and Boomi under Quest. The software offerings will complement Dell's services and data-center technology stack, which includes PowerEdge servers and a growing list of networking and storage products being acquired by the company.
Dell's Gladden said the company is still doing its due diligence on Quest, and integrating assets is not an overnight job.
"We see it as we work through that process and due diligence of understanding the company, not only a lot of interesting portfolio products to help us in other parts of our portfolio aligned with cloud, security focus and systems management and some of the things we already have in the marketplace, but also an opportunity to run the place better," Gladden said.
Some of Dell's acquisitions have paid off, though. Most of Dell's business units underperformed during the most recent fiscal quarter, save servers, which saw a shipment and revenue boost. A part of Dell's success in servers could be attributed to Boomi and Kace, which are complementary offerings, King said. Boomi eases deployment and management of cloud applications, and provides tools to easily shuffle data between on-premise and hosted applications.
Dell is a leader in iSCSI storage with EqualLogic, and is doing well in vertical markets like education and health care with Perot Systems, both of which slipped into Dell's operations very well.