Dell’s acquisition of Wyse Technology may have been a boneheaded move.
Dell bought Wyse to get a jump in the desktop-as-a-service market. This is where companies use their PC software over the cloud including the operating system.
In a research note, Sterne Agee analyst Shaw Wu pointed out a lot of reasons why buying Wyse wasn’t a good idea.
- Dell could have chosen to partner with Citrix and VMware more on software.
- Dell just bought a boatload of cheap hardware. Wyse sells services but also makes a whole bunch of dumb Linux machines without hard drives.
- Dell may not even get all that much out of the deal. Wyse’s revenue, at $375 million, represents only 0.6% of Dell’s “consensus FY13 revenue,” Wu points out.
Dell did not disclose terms of the deal but Wu says he believes Dell paid $400-$600 million. He continues to rate Dell shares as underperform.
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