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Dell Buying Quest Software For $2.36 Billion

ROUND ROCK, Texas (AP) â¿¿ In a move to branch out beyond the weakening personal computer business, Dell said Monday that it's buying Quest Software for about $2.36 billion.

Dell said Quest would make it more competitive in the server, storage, networking and computing services business.

Quest helps companies manage databases and provides other corporate IT services. Quest's technology would add to its security and data protections offerings, along with other services aimed at business customers, Dell said.

With the deal, Dell, the second-largest U.S. PC maker after Hewlett-Packard Co., is trying diversify beyond the lower-margin business of making personal computers. PC sales have weakened in the last two years as consumers increasingly navigate the Internet on smartphones and tablet computers such as Apple Inc.'s hot-selling iPad.

Both Dell and HP have been buying software and technology services companies to expand beyond PCs and plumb the more fertile territory of advising big companies and government agencies on how to manage their technology needs. As part of that process, the companies hope to sell more software and computing equipment.

In late May, Dell Inc. reported disappointing first-quarter financial results and predicted weak sales in the current quarter. The computer maker said sales to government, big businesses and consumers decreased. Total product revenue fell 5 percent to $11.42 billion in the Jan.-March quarter as revenue from mobility products, software, desktop PCs, and storage products all decreased. Sales to consumers took a particularly sharp decline of 12 percent, while government sales to fell 4 percent and revenue from large businesses dipped 3 percent.

Sales to small and medium-sized businesses were a bright spot. They grew 4 percent.

Dell's acquisition comes in the midst of some belt-tightening at the company. In June, it outlined a cost-cutting plan designed to trim expenses by $2 billion over the next three years.

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