Dell buys family-owned MessageOne for SaaS

Part of Dell Computer's transition strategy is to no longer focus all its interests on one side of the technology market exclusively. That was made clearer today with another acquisition of a service-oriented software provider.

Dell has added a second ingredient to an emerging arsenal of SaaS (software as a service) tools for customer self-service. Today, the company announced it has acquired e-mail archiving, compliance, and business continuity vendor MessageOne, a company owned by Dell CEO Michael Dell's brother, Adam, and two investment funds managed by the Dell family.

Software from both acquisitions will become part of ProSupport, a new series of service offerings from Dell that allow customers to choose their own level of tech support based on their own skills and expertise.

In announcing the acquisition, Dell officials said the company took pains to avoid potential conflict of interest by excluding Michael Dell from the negotiations, allowing it to be handled instead by independent members of Dell's board with an opinion from consultant Morgan Stanley.

Upon completition of the deal, Adam Dell will receive $970,000, Dell's parent will obtain $450,000, and Michael Dell, Susan Dell, and their children's trust will get $12 million -- though that latter amount will be donated to charity.

Industry analysts generally overlooked the family connection, responding favorably to the MessageOne buyout as a further sign that Dell is recognzing the greater revenue benefits of services over hardware and software sales.

Stephanie Baraouras, an analyst at Forrester Research, sees Dell's acquisition as beneficial to both customer service and pricing.

"Increased competition will force the more rapid development of additional SaaS services for information management and infrastructure and it will put pressure not only on pricing but on improved customer service," according to the Forrester analyst. "Going forward there will be a lot of focus on customer service such as who can provide the absolute most secure environment in a multi-tenant architecture, who can provide 24x7 customer support, and who can provide a unified customer experience when it comes to metering, billing and reporting across all SaaS services."

In a blog on Forrester's Web site, the analyst went further, maintaining that Dell didn't want to feel left out of the SaaS race as it watched other vendors complete SaaS buyouts, including Seagate, EMC, and IBM.

Dell made its first steps into SaaS last December by buying Everdream, an electronic software distribution often compared favorably with Salesforce.com.