On Friday Dell announced a noteworthy acquisition in the storage and backup space. It’s buying AppAssure, a US-based provider of software to support application protection across physical, virtual and cloud infrastructures.
Privately-held AppAssure has been a fast-growing software player in the US, and Dell has no doubt paid a hefty multiple for this purchase (financial terms aren’t disclosed, naturally). But its motivation is not hard to fathom. Cloud-based storage and backup services are set for decent growth, especially among the sorts of mid-market clients where Dell is trying to target its services efforts. But it’s an area where barriers to entry are not especially high for existing infrastructure service providers and where specialist providers are also competing (including Little British Battler Redstor, for example).
Dell has invested heavily in its storage offerings in recent years, and by buying AppAssure the company is trying to carve out a little bit of differentiation around assurance of application performance in this competitive space. Naturally it will also add AppAssure’s application-aware capabilities to its relevant server lines.
The only slight element of mystery is the role of Dell’s newly formed Software Group in all this. Unveiled earlier this month and headed by former CA supremo John Swainson, the Software Group has a remit to push software-based innovation across Dell’s product and service lines. Differentitation through software-led innovation is vital, but Dell needs to be careful not to create another stovepipe. The value of a software asset like AppAssure will only be realised if it is fully integrated across relevant products and services.