After All That Buildup, Dell Buys Boomi (Who?)

Michael Dell


One day after Michael Dell teased the market with promises to buy a company “related to cloud computing,” Dell has announced the acquisition of Boomi, a privately held Pennsylvania company that specialises in software integration. Terms of the deal were not disclosed.

The acquisition ties into Dell’s growing services business, which got kickstarted with last year’s acquisition of Perot Systems.

While best known for selling hardware, Dell’s services business is an increasingly important growth driver for the company: in its last quarterly earnings filing (PDF here) Dell said that pure services revenue grew 55% from the previous year, thanks mainly to Perot. Services (including software-related services, a slightly different category) also offers better margins than hardware. In the July quarter, Dell’s services business earned $872 million on $2.9 billion in revenue.

Boomi sells a hosted service called AtomSphere that companies can use to connect different software systems together so they can share data. This is a complicated chore, and other vendors have been attacking it for year–Microsoft, for example, offers software called BizTalk that companies can use to connect different systems together. Part of Microsoft’s Azure cloud computing platform, Azure AppFabric, can also be used for some integration tasks.

The deal isn’t nearly as sexy as if Dell had bought a major cloud computing provider like Rackspace–whose shares briefly spiked 7% on the rumour–but Michael Dell wouldn’t have been blabbing if he was going to buy a big public company.

Earlier this year, Dell lost out to HP in a bidding war for storage company 3PAR. That was a cloud play: dedicated storage is a requirement for the data centres used to power cloud computing applications, and both Dell and HP hope to make money selling the infrastructure for those data centres.

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