November 16, 2012
Dell (Nasdaq: DELL ) reported poor earnings Friday, with a sales decline of 11% resulting in profits plummeting 47%. Concurrent with the earnings release, Dell announced a deal to purchase Gale Technologies, a "leading provider of infrastructure automation software" for cloud computing.
Dell did not disclose the terms of the transaction -- how much revenue and profit Gale brings with it, or even how much Dell is paying to acquire the company.
Dell said Gale's business will be complementary to Dell's own focus on enterprise, or business customers. The company further pointed out that while sales were down in Q3, Dell's server and networking business, into which Gale will integrate, grew its sales 11%, and was the only such server vendor among the globe's top three to post positive unit growth last quarter. According to Gartner, the top three server vendors are Dell, Hewlett-Packard (NYSE: HPQ ) , and IBM (NYSE: IBM ) .
Dell intends to integrate Gale into a new division, labeled "Enterprise Systems & Solutions," which will focus on developing "converged and enterprise workload solutions." Vice president and general manager Dario Zamarian, who previously headed Dell's Networking business, will head the new division.