Dell announced the acquisition of EqualLogic tonight for a pittance… $1.4 billion. The storage virtualization vendor is the biggest acquisition in Dell history:

Under the terms of the agreement, Dell will purchase EqualLogic for approximately $1.4 billion in cash. The acquisition of EqualLogic is expected to close late in the fourth quarter of Dell’s fiscal year 2008 or early in the first quarter of fiscal 2009. The company expects the acquisition to be dilutive to earnings per share, excluding the amortization of intangibles, by $0.02 to $0.05 in aggregate for Fiscal 2009 and Fiscal 2010. The acquisition has been approved by the board of directors of each company and is subject to regulatory approvals and customary closing conditions.

EqualLogic was planning on going public and according to their filing they only made $68 million in revenue last year. That’s a purchase price of 21 times revenue. It’s also been a good year for acquire-es in open source business with a 50-500x acquistion of Xensource and a 60x revenue acquisition of Zimbra . However, it’s amazing to me that we can see so many acquisitions at 20x revenue and up. Maybe it’s my background as a financial guy that makes me go…hmmm.

As I look at these acquisitions I wonder over what time period they will be considered success. If you use a multiplier of 10X revenue for that business that was acquired (which is still generous) that means Dell would have to realize at $140 million in revenue from EqualLogic to recoup their investment in increased stock valuation (which would be diluted in their hardware-centric business so even then it’s not a  great measurement). That would mean Citrix would have to realize $50 million in direct revenue from Xensource and Yahoo! would need $38 million from Zimbra. Maybe you would have to wait until that business threw-off revenue to recoup the purchase price as the measure of success which would take even longer.

I can see EqualLogic enabled by the Dell channel seeing the quickest ROI but I have to wonder over what period we will see Xensource and Zimbra pay-off. On the other side maybe that’s the only way software behemoths can grow and in their case it might be worth it. Food for thought.

Technorati Tags: acquisitions, Dell, EqualLogic, financial, Xensource, Zimbra

So a couple of months back I was frustrated with Dell so I started toinvestigate Apple as an alternative to my longtime preferred laptopvendor. Then out of the blue Dell comes through for me via my blogcontact form.  They noted that my blog mentioned problems I was havingwith Dell and they asked if they could help solve my problem.

They did a quick check of my records saw my problems and a nice fellowby the name of Rick South apologized for the inconvenience. Afterrelaying my six months of hell to them, they replaced my Inspirion 9100 with a new Inspirion E1505. It looks like earlier this year they started focusing on how they were being discussed in the blogosphere and taken some action. 

Big ships turn slowly and Dell may be guilty of poor customer service,but it looks like they are realizing that having the lowest price isnot on a winning strategy. It’s hard to figure the ROI on good customerservice when you run a company. Experience tells me that referrals andfuture purchase decisions are seldom quantified enough for beancounters to understand how important that has been. Take me forexample, I have been responsible for many millions of dollars in Dellpurchases in the past. Based on my recent experience I will likely beresponsible for many more. Two months ago I wouldn’t have spent a dimeof my money or the company I work for’s money on a Dell product. 

So now I am at a crossroads, I did end up getting an Apple Mac Book Proat my office but I am growing fond of my new Dell laptop as well.  TheDell isn’t perfect,  battery life was okay but not great so I bought anew longer-life battery, I also "pimped" my case with a carbon fiber QuickSnap.The folks at Dell also supplied me with a new express EVDO card becausemy former laptop had a PMCIA slot and my new laptop has an ExpressCard slot. 

The decision I have made is that no matter what laptop I use on a dailybasis will end up using some kind of virtualization software. I like towork in a Linux desktop but I find that getting my EVDO card to work onLinux natively has not worked out very well. However, if I use anotheroperating system with vendor support for my EVDO then I can then workin a Linux desktop hosted in a virtual machine but leave myconnectivity to be managed on a supported operating system. So whatdoes that mean for my desktop environment? I will either run Windowswith a VMware image of Ubuntu or a Mac OS laptop with Parellelsrunning Ubuntu. Some day I hope that a vendor will support EVDO onLinux but untilt hat day comes I am going to temporarily abandon mynative Linux laptop (though I will still have a wild assortment ofLinux running on various desktop PCs).

I do love my new MacBook Pro it’s an awesome machine but I am going tobe suffering from a learning curve. I would probably qualify as anexpert on both Linux and Windows desktops but when it comes to Mac it’sbeen many years since I used one on a regular basis. Back in the 1990sI was a technical support representative for Apple connectivity to theInternet and I could troubleshoot 7.5.x and 9.x operating systems.However when it comes to OS X I am not quite up to speed. I am currently looking at the red Mac OS X TigerUnleashed book as a way to help me understand the operating system wellenough to use it on a daily basis. Now the question is the temporarydrop in productivity worth it?

Technorati Tags: Dell, Linux, Mac