Photo: Pano Logic
Some analysts say that Dell’s purchase of Wyse is unwise. But the former CEO of Wyse disagrees. He says it will let Dell beat HP in an area where HP has been kicking Dell’s butt.John Kish, who ran Wyse from 2004 to 2007 and is now CEO of competitor Pano Logic, explains.
“HP has a thin client company. They bought Neoware a few years ago. It is something that HP has competitively been using against Dell in a number of accounts,” says Kish. Dell’s purchase of Wyse, the largest supplier of thin clients, one-ups HP.
Kish says that thin client market is equivalent to about 5% to 10% of the desktop PC market. By buying in, Dell has filled a gap.
Wyse helps Dell in a couple of other ways, Kish believes.
- The point of thin clients is to sell servers. It doesn’t work without them.
- Thin clients also tend to lead to services contracts.
- Thin client users have already bought into the idea of cloud computing. They are the early adopters for more cloud software and now they are Dell’s customers.
- Sterne Agee analyst Shaw Wu said that Dell could have done better by partnering with Citrix and VMware to build a desktop virtualization market, instead of buying a company that makes low-end hardware. Kish points out that Wyse had those relationships. Now so does Dell.
- Dell is a hardware company, so it may be better able to do desktop virtualization through thin client hardware than in the kind of software-only business that Citrix and VMware offer.
The purchase of Wyse is making Dell look more and more like HP. Dell and HP now compete over servers, network gear, PCs, printers, and enterprise private clouds.
So the big question is, can Dell beat HP at its own game?