Dell acquires SaaS platform Everdream

Dell is making an interesting move into services by acquiring an on-demand provider of desktop management services, Everdream.

Everdream's business is aimed at the SMB market, to provide services such as desktop asset management, software distribution, license compliance, antivirus management, backup, remote access, and remote support--all delivered on a hosted, on-demand platform. Everdream has taken a partner-approach. All of the services mentioned above are provided through partners, such as Symantec, Webex, Iron Mountain, and Microsoft. Everdream provides the SaaS (software as a service) platform that allows all of these partner-services to be provided on-demand.

The benefits are clear: small businesses are relieved from having to build and maintain an IT infrastructure and support organization internally. SMBs also are generally too small to outsource desktop support as traditionally provided--most service providers do not even consider a contract for less than 5,000 desktops. Everdream's services, on the other hand, could be set up for a handful of machines.

So why is Dell interested in Everdream? Clearly, acquisition of its SaaS platform moves Dell more strongly into the services business, where margins are higher than in shipping commodity desktops. Dell already offers significant professional services, but more along the lines of traditional outsourcing contracts. Everdream's business model is disruptive to that business and gives Dell a new way to compete with H-P, which has been beating Dell recently in desktop sales.

According to Hoovers, Everdream currently has less than 200 employees--still a small business itself. With the acquisition by Dell, expect this business to grow significantly. As a SaaS provider, it scales easily.

SaaS, in theory, is disruptive to traditional licensed software sales and traditional professional services. Although many companies have deployed SaaS solutions on limited basis, the model has still not taken over in a big way. If Dell is successful in taking Everdream to the next level, it may validate SaaS as an option for a greater number of businesses and really encourage greater adoption.

Dell's press release gives details on the Everdream acquisition.

Josh Greenbaum has an interesting piece outlining why he thinks Everdream's approach using partners is better than that of Salesforce.com.

Update, 10:21 a.m. Greenbaum and Dan Farber, both bloggers on ZDnet, are having now gotten into a bit of a debate about the relative merits of the platforms of Salesforce.com and Everdream. Read Farber's rebuttal to Greenbaum, and Greenbaum's response.

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