Microsoft Joins Efforts to Take Dell Private: Reports

By Jeffrey Burt  |  Posted 2013-01-22 Print this article Print

Microsoft would have a keen interest in seeing a strong Dell. The software giant is still the top OS vendor for PCs and servers, but Apple and its iOS and Google with its Android operating systems dominate the booming tablet and smartphone spaces. Microsoft is looking to gain a greater foothold in the space—Windows 8 is optimized to run on tablets, and the company also is offering a version of the OS for the ARM chip architecture. Still, despite the slowing sales, Gartner analysts said the PC industry still shipped more than 352.7 million units in 2012, which is a lot of systems, according to Charles King, principal analyst with Pund-IT Research.

"People are still buying 1 million PCs a day," King told eWEEK. "For an industry that has been labeled ... on its way out the door, that's pretty good."

For PC makers, the trick will be making PCs desirable again in 2013, according to David Daoud, an IDC analyst.

"Consumers expected all sorts of cool PCs with tablet and touch capabilities," Daoud said in a statement Jan. 10, when IDC released its 2012 PC numbers. "Instead, they mostly saw traditional PCs that feature a new OS (Windows 8) optimized for touch and tablet with applications and hardware that are not yet able to fully utilize these capabilities. Despite a generally weak performance, some leading brands managed do to well relative to the market. HP, Lenovo, Asus, and Samsung were among the top performers, taking advantage of some consumer interest in Windows 8, and a push to build up their presence ahead of 2013."

This is not the first time founder and CEO Michael Dell has considered taking the company private. Since returning to the CEO chair in 2007 after three years away, Dell has aggressively pushed to build up its enterprise IT services through both in-house development and outside acquisitions, and reduce its reliance on PCs. Michael Dell, who owns about 16 percent of the company, reportedly told financial analysts in 2010 that he had considered taking the company private, though it never materialized.

However, if he does it this time, it could prove rewarding for his efforts, Roger Kay, principal analyst with Endpoint Technologies Associates, told eWEEK last week.

“Michael Dell has been looking to run the company with a long view, and Wall Street is very impatient with that," Kay said. "In private equity, they'll wait 10 to 15 years for payback."

Dell has a market capitalization of more than $19 billion, and generated more than $42 billion in revenue and $1.8 billion in income during the first three quarters of last year.


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