Dell buys Make Technologies: Three acquisitions in four days
Summary: Dell is making a big bet that companies are going to have to modernize legacy applications, re-host them and make them cloud friendly. — Dell is shopping like a teenager just handed a credit card.
Context & Ripple Effects
This is the third leg of a buying sprint that began with the $1.4B EqualLogic purchase in 2007 and continued through Boomi in 2010, both aimed at building an enterprise storage-and-integration stack rather than selling boxes. In February 2012 Michael Dell declared the company was no longer a PC business, and March brought Wyse for virtualized thin clients alongside the SonicWALL security deal — Make Technologies closes the loop on legacy application modernization.
The pickup across Business Wire, the Wall Street Journal, The Register, Computerworld and AllThingsD on the same day shows how closely the market is watching whether Dell's M&A cadence can actually convert it into an enterprise IT services vendor.
First-order effects
- Dell gains a legacy-application modernization and cloud-rehosting capability it did not build internally, slotting next to Boomi's integration platform and Wyse's client virtualization for customers migrating old apps to the cloud.
- The four-day, three-deal pace puts integration load directly onto Dell's services organization, which must absorb Make Technologies' teams and methodology while SonicWALL's near-1,000 employees are still settling in.
Second-order effects
- HP, IBM and Accenture-style integrators now face Dell pitching end-to-end migrations — hardware, networking, security, clients and application rework — forcing them to compete on full-stack transformation deals rather than individual product lines.
- Boutique modernization specialists like Make Technologies become acquisition targets by default, since hardware vendors need the rehosting expertise to attach services revenue to their cloud pitches.
Third-order effects
- If the pattern holds, PC-era vendors consolidate the enterprise migration stack through serial acquisition, shifting competitive advantage from owning products to owning the deployment layer customers rely on when they re-platform.
- Each bolt-on raises the execution risk of absorption — specialist teams leaving post-acquisition would undercut exactly the expertise Dell is paying for — making integration discipline the binding constraint on the strategy.
The trend: Dell is executing an acquisition-led pivot from PC maker to enterprise IT platform, buying its way down the cloud-migration stack one specialist at a time.