DELL to Acquire InSite One - Analyst Blog

Round Rock, Texas-based PC maker Dell Inc. (DELL) announced its intention to acquire medical storage solution provider InSite One Inc. The financial details of the deal were not divulged. We think that the acquisition could bolster Dell's position in the health care industry.

InSite One provides data archiving, storage, and disaster-recovery solutions to the health care industry, which help organizations to easily retain data as well as share and transfer images. These cloud-based solutions will complement Dell's Unified Clinical Archive platform, which facilities medical practitioners to reduce the complexities in archiving records.

With recent changes in the health care industry, from the American Recovery and Reinvestment Act (ARRA) in 2009, to the reform legislation in 2010, the need for more efficient Revenue Cycle Management, Electronic Medical Record Technology, Clinical Transformation and many other application services call for immediate attention. Dell has remained one of the efficient IT services providers in the health care market, largely facilitating industrial transformation.

According to market sources, 2.6 million terabytes of medical image data will have to be stored by the end of 2014, indicating annual growth of 35%. With cloud-based features from InSite One, Dell's services will be able to simplify data archiving for the IT staff and improve access to images for medical professionals.

Apart from simplifying the storage job for the health care industry, InSite One will provide Dell a storage-as-a-service platform, which will allow users from other industries to archive digital content on a subscription or pay-as-you-go basis.

Dell's firm footing in the storage space is encouraging. Recently, the PC maker acquired enterprise data storage solutions provider Compellent Technologies Inc. (CML) to strengthen the existing level of its storage offerings. We believe that the enhanced storage platform will attract new users from different industry sectors.

Apart from this, we are encouraged by Dell's attempt to shift its focus from PC and server roots to become a data-center vendor with a broader scope. Moreover, Dell's recent endeavor to expand in China is also encouraging. However, soft demand in the Consumer segment, a high debt level and stiff competition in computing and emerging cloud-computing spaces are concerns.

Currently, Dell has a short-term Hold recommendation, as indicated by the Zacks #3 Rank.

 
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