Quest Software says it's going with a sweetened offer from Insight Venture Partners, which brought along Vector Capital, another private equity outfit, to get the $2.17 billion deal done.

They've offered $25.75 a share, 50 cents more than the mystery bidder believed to be Dell offered last week and 12% better than the $23 Insight offered in March.

For insurance the deal calls for a $25 million termination fee, four times more than the original fee. The cap on the bidders' reimbursable expenses has also been raised from $7 million to $12 million.

Whether Dell will test the sincerity of the arrangement is anybody's guess. Wall Street evidently thinks so. It still has Quest stock above $26.

Quest agreed to sell to Insight in March but made use of a "go shop" provision to seek a better offer. Dell was reportedly close to a deal a few weeks ago but it supposedly blew up.

Bloomberg reports being told by a source that Quest CEO Vinny Smith, who owns about 34% of Quest, prefers the Insight deal because he could keep running the systems management company. He's now supposed to roll at least 84% of his Quest stake into the private company. Insight and Vector are each supposed to kick in $187 million in equity and borrow $1.2 billion.

The so-called strategic bidder was willing to pay cash.

Dell last week told analysts that it meant to use deals to boost revenue from data center hardware, software and services by 45% to $27.5 billion by fiscal 2016 to get out from under its dependence on PCs.

The last bidding war Dell was in was in 2010 when HP wound up paying a very steep $2.35 billion for 3Par, the storage company. Michael Dell subsequently told Bloomberg HP overpaid and that he was glad he dropped out.