Dell to Go Private in $24.4 Billion Deal That Includes Microsoft

By Jeffrey Burt  |  Posted 2013-02-05 Print this article Print

Throw in the various regulations that public companies need to keep up with—particularly Sarbanes-Oxley—and the idea of taking the company private makes sense, he wrote.

"I think what private equity means for Dell is that they can get out from under the regulatory burden, and Michael Dell can make the kinds of changes he needs to redirect the company focus," Johnson wrote. "The departure of their Chief Strategy Officer David Johnson (my namesake, apparently) a few weeks ago signals that a major strategy shift is in the works. "IT has only grown more complex. Very few companies are in the business of simplifying it in dramatic ways. Apple is one. Most others are just applying band-aids to a bursting pinata.

"Dell's opportunity is to double-down on simple and astoundingly innovative solutions to complex problems with a level of quality, excellence and speed that their still-hobbled public competitors can't match," Johnson wrote.

Microsoft also has an interest in keeping Dell healthy. Microsoft's software is found in most PCs on the market, but like other established tech vendors, it still doesn't have a strong presence in the booming mobile device market, particularly in smartphones and tablets. Microsoft, like Dell, has a keen interest in seeing a healthy PC market, while a strong Dell also could give it an even greater presence in such areas as cloud and virtualization.

Reports had circulated in recent weeks that Microsoft's possible involvement had created a snag in the negotiations, with discussions centering on the amount of control Microsoft would have over the operations at Dell. Those issues apparently have been resolved.

According to Forrester's Johnson, Microsoft also is looking for an enterprise channel for its in-house hardware, and tighter integration between the hardware and Windows operating system could help boost Microsoft's cloud capabilities, thanks to such benefits as performance optimization and better resource automation.

"Microsoft needs more supply chain expertise and capacity for PC hardware, and needs more dedicated focus from an OEM like Dell to execute on a strategy of better integration between the operating system and hardware—both on the desktop and in the data center," he wrote.


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