Telecom Driving Data Center Demand
February 5, 2013
What’s the Difference between a Tier III & IV Data Center
February 6, 2013
Company founder Michael Dell has announced plans to take his company private. Dell computer is currently a publicly traded company but has struggled amidst a flailing PC market. Dell and his team have their work cut out for them but have secured financing from Microsoft.
Michael Dell has announced plans to take his company private. Dell computer is currently a publicly traded company but has struggled amidst a flailing PC market. Wall Street analysts say Dell will have a hard time pushing the deal through but with financial backing from Microsoft anything is possible.
The Long Term Plan
Dell has tried to shift its focus from PC manufacturing to cloud services and software. PC sales still account for nearly half of Dells annual income yet the company has managed to fall behind the competition.
Apple and Samsung have stolen the market by introducing smart-phones and tablets; catering to the PC market isn’t a profitable business model anymore. Taking the company private will create more agility for Dell and allow them to develop new products for the private enterprise. Avoiding the day-to-day grind of Wall Street factors into the decision as well. If the $24 billion deal goes through, Dell won’t have to answer to shareholders and can focus on delivering innovative products.
Can Dell Win?
There are pros and cons to taking such a large company private again. The downside: Dell will no longer have access to the type of equity it currently has at its disposal. Relying on money from Microsoft diminishes the goal of financial independence even further. If Dell is to cut out on their own in order to restructure and develop new products as they see fit, they might be better off securing less money. Outside investors will want to call shots but perhaps that’s a gamble Dell is willing to take. Still, Microsoft says it will give $2 billion to Dell to help get the deal going. Dell’s thinking is sound; going private might help the company reach its long term goals faster. But is going private going to save a company who has failed to innovate anyway? Wall street won’t stand idly by. As of Monday, Dell’s stock closed 25% higher before the rumors of the deal surfaced. Perhaps shareholders want the deal to go through. Hopefully Michael Dell has what it takes place his company back on top again.
