Last week Dell (NASDAQ:DELL) announced that it has signed a definitive agreement to acquire SonicWALL, Inc., a network security and data protection firm. The transaction whose financial terms were not disclosed was approved by the board of directors at each company and is expected to close in the second quarter of Dell’s fiscal year 2013. 
The acquisition will complement Dell’s rapidly growing security software and services portfolio, which already includes security services, cloud security solutions, data encryption solutions and vulnerability and patch management, and thus expand Dell’s enterprise offerings.
Over the past few years, Dell has diversified away from its PC business and expanded its enterprise solutions portfolio through a number of acquisitions to offer customers a complete range of products and solutions. Dell is fast transforming into an enterprise focused firm with software and services now making up the core of its offerings. Industry giant and one of Dell’s major competitors, IBM (NYSE:IBM) has already transformed itself into a enterprise software and services firm reaping tremendous returns over the past few years while HP (NYSE:HPQ) – the global leader and Dell’s rival in the PC market – is making efforts to do the same.
We currently have a $25.60 Trefis price estimate for Dell which is significantly above the current market price.
IT Security: A Major Concern, A Huge Market
Companies of all sizes, worldwide, are face increasing challenges in maintaining effective IT security primarily due to the exponential growth of data and rapid adoption of cloud-based solutions as well as increased presence of consumer devices brought into the enterprise environment.
According to the research firm Infonetics, the network and content security appliance and software market was worth $8.7 billion in 2011 and is expected to increase by another 8-10% in 2012.   The high visibility of security issues is likely keep security at the top of the priority list of shrinking IT budgets in 2012 and beyond, as was the case in 2011.Notes: