Computer giant Dell Inc. said it will acquire information technology management software provider SilverBack Technologies Inc. for an undisclosed amount. SilverBack was founded in 1999 and raised $9 million in 2002 from Prism Ventures and Spectrum Equity Partners. Dell has been dealing with an accounting investigation by the Securities and Exchange Commission and a stagnant stock price. It brought back its eponymous CEO, Michael Dell, in February to help the company establish a growth strategy. At the time, analysts recommended the company consider acquisitions in the services sector.

SilverBack of Billerica, Mass., provides IT management software that would make it easier for Dell to offer hosted IT services, but SilverBack generates about $5 million in revenue, according to estimates from Hoover’s. That’s a pretty small company to become one of the bedrock pieces of a managed service strategy offered by a $60 billion company, especially one with more than $12 billion in cash it could use to spend on bigger players.

Tech Confidential explained that Dell has little experience doing deals, which may account for its starting off with such a small one. Perhaps it is weighing the risk of integrating a large services buy against the pain of integrating several smaller companies. Dell doesn’t talk about its acquisition strategy, but it's worth watching to see how well it does with SilverBack and how bold it gets with other deals. —–Stacey Higginbotham

See Feb. 2 story from TheDeal.com
See July 3 post from Tech Confidential

Tags: Dell, deals, acquisition, m&a, mergers