Summary
Historical trends in Dell's path of M&A activity may not tell the whole story. Dell's desire to grow may not translate into the purchase of a storage or computing hardware company but might instead focus on innovative software and services companies. Dell's future is less about boxes and more about transformation to innovation in software and services.
Analysis
Netbooks are driving the price of mobile computing to lows faster than any trend in notebook computers. A side effect of the netbook is the growth of cloud originated services for the storage and collaboration or sharing effects that emerging audiences crave. Hand held devices such as smart phones or other mobile carrier tethered devices have the burden of fleet management if done as an en masse enterprise play.
While it might seem appealing for Dell to go out and grab up some kind of handset market, the Palm purchase thinking is flawed. It is important to understand that handsets today are in flux and the year over year tuned to the demands of mobile carrier contracts and not the innovative paths of the hardware manufacturers.
Why would Dell seek to enter a market where it now must contend with Apple, BlackBerry, and Nokia in terms of North American biased mobile carriers -- the same mobile carriers with no desire to give up anything that affects their own bottom line if they can control the spread of the innovation?
Dell will likely focus energies on extremely a promising collection of companies vs. a single large purchase -- more on that at the end. When considering what private cloud computing offers to the medium to large enterprise market, there is reason for attention. Amazon EC2 and Google App Engine don't fit the models and needs for larger enterprise just yet and there is still a market waiting to be tapped.
Presently this private cloud oriented market is fractured among several promising companies.These companies will have demonstrated thought leadership in the area of software systems management and private cloud exploitation. Some of the candidate companies would likely be:
Eucalyptus (private cloud computing)
SpringSource (large application life cycle management)
Platform (access to HPC markets)
AppNexus (provisioning)
Aster Data (data warehousing)
FastScale ( dynamic software environments)
Reflex Systems (virtualization security firm)
That said, if there were a large merger case to be made on the scale of what Dell wants to align with in the industry, one would have to take a look at the virtualization and cloud synergies of a Dell and Citrix combination. The benefit would be that Dell gains the benefit of prior activity in this space.
In conclusion, Dell will likely find names that are not the best known and not the larges. By combining these companies it will be possible to patch together the private cloud market into a newer and more innovative Dell.
