Dell (Nasdaq: DELL), the No. 3 PC maker, said it would acquire Quest Software (Nasdaq: QSFT) for $2.4 billion, topping a bid by private equity firms working with its CEO.

The acquisition bolsters Dell's shift to providing custom services and software, by adding the Aliso Viejo, Calif.-based Quest's software and tools products to its arsenal.

Dell's winning bid of $28 a share topped earlier bids from Insight Venture Partners of New York and Vector Capital of San Francisco, who'd bid as much as $25.50 for a deal worked out by Quest CEO Vincent C. Smith.

While one of Dell's biggest acquisitions, the Quest takeover, expected to be completed within six months, makes little dent in the $17.2 billion in cash and investments the Round Rock, Tex., company held when its first quarter closed May 2.

The protracted bidding war, though, may have also been a way for Quest to tempt others in the software sector, notably Oracle (Nasdaq: ORCL), No. 1 in databases and enterprise software, which is highly acquisitive. Oracle reported cash and investments exceeding $30.7 billion in its fourth quarter ending May 31.

Quest might also have attracted bids from New York-based Infor, the private-equity-backed company that has rolled up many other enterprise software companies, International Business Machines Corp. (NYSE: IBM) and others.

Dell recently hired John Swainson, the former CEO of CA Inc. (Nasdaq: CA), long known as Computer Associates International, to run its software business. Swainson had previously spent decades at IBM.

We intend to build upon the strong momentum Quest brings to Dell, he said.

Shares of Quest fell a nickel to $27.76 in Monday trading. They'd previously gained about 50 percent since mid-March, when the P/E buyout was first announced.

Shares of Dell fell 12 cents to $12.39, as shares of Oracle rose 9 cents to $29.90 on Monday..