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Dell's Wyse buy a hedge against slowing PC sales

Dell moves to boost its thin-client offerings

By Agam Shah
April 2, 2012 04:30 PM ET

IDG News Service - Dell's plan to buy Wyse Technology is an effort to boost its client hardware portfolio and protect the company from the effects of the recent slowdown in PC sales, analysts said on Monday.

Wyse provides thin-client hardware and related software tools for virtualized and Web-based computing environments. With PC sales declining, Dell had to boost its thin client portfolio not only to keep enterprise customers engaged, but also to catch up with competitors like Hewlett-Packard, analysts said.

Thin and zero-client devices are alternatives that could help companies move to virtualized environments and the cloud, and Wyse provides the expertise, distribution channel and intellectual property, said Jeff Clarke, Dell's vice chairman and president, global operations and end-user computing solutions, during a conference call.

Wyse's thin clients run on the proprietary ThinOS, Linux and embedded Windows OSes, and the company also offers a software stack compatible with Microsoft, VMware and Citrix virtualized environments. Dell until now resold Wyse technology, and also offers virtual desktop options through partnerships with companies like Desktone.

"The momentum around alternative computing is a trend that we see many customers continuing to experiment with and in many cases, beginning to deploy. The adoption rates are still relatively low for desktop virtualization, but there clearly are a lot of customers out kicking the tires," Clarke said.

The adoption rate of virtual desktops is growing at a rate somewhat similar to server virtualization close to a decade ago, Clarke said. The technology is especially gaining importance in the heavily regulated environments of government, financial services and health care, where data security and management rules are especially strict, he said.

"I would emphasize we don't see the entire world going to thin clients, we still think there's a healthy PC demand in the industry. And there's a balance of alternative computing that allows people to take advantage of securing their information, managing their assets in a very differentiated way," Clarke said.

Wyse was once a competitor with Dell, and sported a logo with the moniker "no PC" to describe some of its thin-client products, said Tom Mainelli, research director for mobile connected devices at IDC.

The logo has now been removed from Wyse's website, though a webpage on Google cache still shows Wyse using the logo as a way to describe cloud-computing thin client products.

The virtual desktop has changed over the last few years and has taken on a more cloud-like approach, Mainelli said. Multiple virtual desktops were previously centrally managed by a dedicated server, but now have more flexibility with content and services delivered through virtualized servers.

"I would argue that Dell is buying Wyse because Dell has been traditionally weak in the thin-client market," Mainelli said.

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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