iioz Dell, with $10 billion for M&A, to offer open

Follow me on Twitter @mjasay.

The signs are everywhere that chief information officers are increasingly looking to open source to cut costs and boost productivity. And they’re not just looking: Forrester Research survey data suggests that 87 percent of enterprises that try open source actually realize cost savings from its adoption.

This sounds like a perfect message for Dell, the low-cost hardware company, to be selling.

Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay.


Why indeed?

Dell, with $10 billion for M&A, to offer open source

According to BusinessWeek, Dell has amassed a $10 billion war chest with which it intends to buy BMC Software, Symantec, or another big technology company to expand into new markets–and particularly software markets–in a bid to boost profitability.



So why is Dell talking about buying up bloated, proprietary software companies out of one side of its mouth, even as it acknowledges that open source does the job for less money out of the other side of its mouth?

The more advanced the customers, the more likely they will adopt open source, because they are likely to ask why they should spend money on something they can get free.

Yet even as Dell ponders where to spend its cash, it is reportedly rolling out a program to provide free, open-source applications to small and midsize businesses. The reason is simple, according to Amit Midha, president of Dell’s Asia-Pacific and Japan region for the SMB business:

Maybe Dell should straighten out its story by buying Red Hat?

Dell could very well be envisioning offering open source to seed new customer accounts and then upselling proprietary software, similar to IBM’s model. But I suspect that the company’s software strategy is nowhere near as nuanced as IBM’s. I think that this is simply an example of a top-down strategy (buy big software companies!) conflicting with bottom-up demand (our customers want open source!).

Comments are closed.

Categories

Archives

Blogroll