Linked by Thom Holwerda on Tue 5th Feb 2013 14:29 UTC
Hardware, Embedded Systems "Dell today announced it has signed a definitive merger agreement under which Michael Dell, Dell's Founder, Chairman and Chief Executive Officer, in partnership with global technology investment firm Silver Lake, will acquire Dell." So, Dell has gone private, and Microsoft has contributed a $2 billion loan to the deal.
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So...
by PJBonoVox on Tue 5th Feb 2013 14:43 UTC
PJBonoVox
Member since:
2006-08-14

I don't really know enough about company ownership to understand the purpose of this. Can someone explain what this might mean for the future direction of Dell?

Reply Score: 2

RE: So...
by sukru on Tue 5th Feb 2013 14:52 UTC in reply to "So..."
sukru Member since:
2006-11-19

I think this move will allow Micheal Dell to run the company more freely.

Reply Score: 4

RE[2]: So...
by Lennie on Tue 5th Feb 2013 15:00 UTC in reply to "RE: So..."
Lennie Member since:
2007-09-22

Yes, that was also was my impression, a lot less investors (thus different opinions) to please.

Reply Score: 2

Except that he's taking on a venture capitalist firm...
by sgtrock on Tue 5th Feb 2013 15:21 UTC in reply to "RE: So..."
sgtrock Member since:
2011-05-13

...and Microsoft to help create the funding. That's kind of like voluntarily putting on a set of handcuffs, leg irons, two dog leashes, handing a leash to two different people going in different directions, then trying to maintain your balance while walking a tightrope. Blindfolded. Without a net.

Edited 2013-02-05 15:22 UTC

Reply Score: 6

Soulbender Member since:
2005-08-18

Might still beat being at the mercy of short-sighted and greedy stock-brokers.

Reply Score: 11

tylerdurden Member since:
2009-03-17

Yeah because large investors are known for their altruism and lack of expectations regarding timely returns on their large investments... ;-)

Reply Score: 2

kwan_e Member since:
2007-02-18

Yeah because large investors are known for their altruism and lack of expectations regarding timely returns on their large investments... ;-)


Size doesn't matter.

All investors are arseholes and we should all be better off remembering that.

Reply Score: 3

tylerdurden Member since:
2009-03-17

Be careful with such generalizations, you may be referring to yourself as an asshole...

Reply Score: 2

kwan_e Member since:
2007-02-18

Be careful with such generalizations, you may be referring to yourself as an asshole...


Most definitely. In Australia, we are required by law to get superannuation management, which invests in a wide range of investments.

I may be an arsehole by definition, that doesn't invalidate the generalization. Investors are arseholes because they're simply there to make money off of money and don't understand the value of working towards something.

Sure, in modern civilization, they're necessary to keep the wheels turning. Much like your arsehole is necessary to keep your body functioning, but at least your arsehole doesn't control your brain.*

* I cannot speak for all people here and elsewhere though.

Reply Score: 4

Soulbender Member since:
2005-08-18

No of course not but they're commonly in it for the slightly longer run.

Reply Score: 2

BluenoseJake Member since:
2005-08-11

Dell has always had a strong relationship with MS, and it is a loan, MS doesn't own part of Dell or anything, but way to beat that drum!

Reply Score: 2

kwan_e Member since:
2007-02-18

it is a loan, MS doesn't own part of Dell or anything


I'm pretty sure if, say, you get a bank loan, they do own you.

Loan n Own != 0

* 'n' being the ASCII approximation of the set intersection operator

Reply Score: 2

RE: So...
by malxau on Tue 5th Feb 2013 15:10 UTC in reply to "So..."
malxau Member since:
2005-12-04

Obviously it's speculative, but this kind of transaction often goes badly. The company will buy out existing shareholders with a combination of cash on hand and new debt. The result is a company with fewer owners, but also fewer options: it is no longer financially in a position to embark on any serious investments, although it can make cuts into existing operations.

Reply Score: 3

Comment by dizmal
by dizmal on Tue 5th Feb 2013 15:28 UTC
dizmal
Member since:
2009-04-22

A week ago, i read blog entry in monday note about dell buyout. There were speculations about this from last month.
http://www.mondaynote.com/2013/01/27/dell-buyout-microsofts-generos...
http://www.techspot.com/news/51355-dell-wants-to-go-private-at-13-t...

in short the premise of Jean-Louis Gassée article is:
"Dell wants to go private because it plans to alter its business model in ways that would scare nervous, short-term Wall Street shareholders [...] Dell no longer likes its legacy PC business and has made efforts to reposition itself as an enterprise player (expensive iron, software and services). Going private will allow it to perform the needed surgery, stanch the bleeding, and reemerge with a much stronger income statement, rid of low-margin commodity PCs."

Reply Score: 5

RE: Comment by dizmal
by JAlexoid on Tue 5th Feb 2013 16:19 UTC in reply to "Comment by dizmal"
JAlexoid Member since:
2009-05-19

A lot less management overhead added for that.

Reply Score: 2

RE: Comment by dizmal
by WorknMan on Tue 5th Feb 2013 17:18 UTC in reply to "Comment by dizmal"
WorknMan Member since:
2005-11-13

Dell no longer likes its legacy PC business and has made efforts to reposition itself as an enterprise player (expensive iron, software and services).


Isn't that kind of what tech companies do when their PC business goes to shit... become an 'enterprise company'?

Reply Score: 6

RE: Comment by dizmal
by tkeith on Tue 5th Feb 2013 20:12 UTC in reply to "Comment by dizmal"
tkeith Member since:
2010-09-01

in short the premise of Jean-Louis Gassée article is:
"Dell wants to go private because it plans to alter its business model in ways that would scare nervous, short-term Wall Street shareholders [...] Dell no longer likes its legacy PC business and has made efforts to re-position itself as an enterprise player (expensive iron, software and services). Going private will allow it to perform the needed surgery, stanch the bleeding, and reemerge with a much stronger income statement, rid of low-margin commodity PCs."



Why not get out of "commodity" computers, but still make PCs. Kind of like Apple only makes a few difference models, with minor addons. Make a low end model with no options for people looking for something cheap, a midline model with a few options and a workstation. It would cut overhead and still allow you to have an option for a company that wants to get everything from one place.

Not disagreeing with you, just adding to your comment.

Reply Score: 2

RE: Comment by dizmal
by delta0.delta0 on Tue 5th Feb 2013 23:03 UTC in reply to "Comment by dizmal"
delta0.delta0 Member since:
2010-06-01

Ok, but here is the rub,

They are a huge vendor of server hardware to Linux based environments. In fact most of the web based start ups I see here in the UK seem to be a Linux shop and they all tend to go with Dell Servers, the larger / older organisations tend to go with HP Servers.

From a desktop arena I can understand Microsoft investing in Dell, but for a business shifting to servers and services, I don't understand the Microsoft involvement, in fact I don't understand why Dell would ever allow it, as the server arena is definitely not dominated by Microsoft or Windows.

Will Microsoft now play a heavy hand in the server buying process ? will they try to force windows only kit ? a windows desktop only software front end to all dell server hardware control ? or windows licenses with Hardware ?. Or will it be a case of just plastering the site with Dell recommends Windows ?

$2 billion of 24 is 8.3% nearly 10% which is a pretty heavy investment, especially if Dell intends to move out of the desktop market entirely.

Reply Score: 3

Control and profit
by jessesmith on Tue 5th Feb 2013 15:29 UTC
jessesmith
Member since:
2010-03-11

I think there are two important things going on here. One is that Michael Dell would gain more control over the company, no longer having the need to report to stock holders. The other interesting thing is he probably expects Dell to become more profitable. It's unlikely a person would invest so much in taking over a business unless he expected an increase in revenue.

Reply Score: 4

this is all bad
by TechGeek on Tue 5th Feb 2013 16:45 UTC
TechGeek
Member since:
2006-01-14

Microsoft was asking for a lot of control for the $2 Billion. Dell's Server line running Linux did a lot of business is a part of the market MIcrosoft was losing share in. Bet you they stop offering Linux at all soon.

Reply Score: 0

RE: this is all bad
by moondevil on Tue 5th Feb 2013 16:56 UTC in reply to "this is all bad"
moondevil Member since:
2005-07-08

May be, then again it is all about business.

Reply Score: 3

RE: this is all bad
by bentoo on Tue 5th Feb 2013 17:24 UTC in reply to "this is all bad"
bentoo Member since:
2012-09-21

Microsoft was asking for a lot of control for the $2 Billion. Dell's Server line running Linux did a lot of business is a part of the market MIcrosoft was losing share in. Bet you they stop offering Linux at all soon.


Sources? Or is this just normal anti-Microsoft paranoia?

Reply Score: 3

RE[2]: this is all bad
by Drumhellar on Tue 5th Feb 2013 18:16 UTC in reply to "RE: this is all bad"
Drumhellar Member since:
2005-07-12

Certainly anti-Microsoft paranoia. Both Dell and Microsoft go through great pains to point out that it is a loan, I doubt that Microsoft will get any seats on the board, or any voting shares...

Reply Score: 3

RE[2]: this is all bad
by darkcoder on Tue 5th Feb 2013 22:41 UTC in reply to "RE: this is all bad"
darkcoder Member since:
2006-07-14

Microsoft was asking for a lot of control for the $2 Billion. Dell's Server line running Linux did a lot of business is a part of the market MIcrosoft was losing share in. Bet you they stop offering Linux at all soon.

Sources? Or is this just normal anti-Microsoft paranoia?


If you had a chance to work on a company that made a deal (no matter which one) with Microsoft, you know that deal comes with "required conditions"

Conditions like:
a. Sell only MS products
b. Use only MS products for your company (only exception is Graphic Departments that can use Macs cause we suck).

Don't know how legal that can be, but have seen it.

Edited 2013-02-05 22:45 UTC

Reply Score: 1

RE[3]: this is all bad
by ilovebeer on Wed 6th Feb 2013 01:17 UTC in reply to "RE[2]: this is all bad"
ilovebeer Member since:
2011-08-08

"Microsoft was asking for a lot of control for the $2 Billion. Dell's Server line running Linux did a lot of business is a part of the market MIcrosoft was losing share in. Bet you they stop offering Linux at all soon.

Sources? Or is this just normal anti-Microsoft paranoia?


If you had a chance to work on a company that made a deal (no matter which one) with Microsoft, you know that deal comes with "required conditions"

Conditions like:
a. Sell only MS products
b. Use only MS products for your company (only exception is Graphic Departments that can use Macs cause we suck).

Don't know how legal that can be, but have seen it.
"

Prove it.

And regarding Dell not offering Linux servers anymore -- that's funny.

Edited 2013-02-06 01:18 UTC

Reply Score: 3

RE[3]: this is all bad
by lemur2 on Wed 6th Feb 2013 09:28 UTC in reply to "RE[2]: this is all bad"
lemur2 Member since:
2007-02-17

"Microsoft was asking for a lot of control for the $2 Billion. Dell's Server line running Linux did a lot of business is a part of the market MIcrosoft was losing share in. Bet you they stop offering Linux at all soon.

Sources? Or is this just normal anti-Microsoft paranoia?


If you had a chance to work on a company that made a deal (no matter which one) with Microsoft, you know that deal comes with "required conditions"

Conditions like:
a. Sell only MS products
b. Use only MS products for your company (only exception is Graphic Departments that can use Macs cause we suck).

Don't know how legal that can be, but have seen it.
"

Maybe we are now starting to see something different from Microsoft?

Linux (the kernel) has twice the market share (over the entire computing market, which covers far more machines than just the desktop) than the Windows kernel does.

http://www.tomshardware.com/news/linux-windows-microsoft-android-io...

Anyone offering servers does more business with Linux machines than Windows. Dell included.

Finally, even on the desktop, Microsoft's attitude to Linux (which previously seems to have been that Linux must be killed at all costs) may possibly be slowly changing:

http://www.phoronix.com/scan.php?page=news_item&px=MTI5MzU

Microsoft Looking At Office For Linux In 2014

From a source in Brussels, Belgium during the Free Open-Source Developers' European Meeting (FOSDEM) this past weekend, I was informed that Microsoft is having a "meaningful look" at a full Linux port of Office thanks to Linux showing signs of commercial viability on the desktop.


!!!!

Edited 2013-02-06 09:30 UTC

Reply Score: 3

MicroDell: the new Apple?
by jello on Tue 5th Feb 2013 18:34 UTC
jello
Member since:
2006-08-08

I admit, I'm just a normal dude, but the way I see this is:
With the $2bn Microsoft has probably (my guess) an option to become a major player inside Dell in the future (if need be...)

To me it looks like Microsoft wants to become the new Apple of the future - and with that MS does not rely on other PC/Surface/Tablet makers - they would gain the same control over the hardware as Apple has over theirs...

And by saying this I don't mean it's a bad thing - for Microsoft...

Reply Score: 2

Dell's taken his own advice
by mkone on Tue 5th Feb 2013 20:50 UTC
mkone
Member since:
2006-03-14

To return money to the shareholders!

People slaughtered Leo Apotheker for proposing to do what people are suggesting Dell now do. Rid itself of the PC division. HP isn't doing any better. IBM saw the writing on the wall a long time ago, and made out like bandits before being forced to.

The PC business has had the air and profits sucked out of it by Microsoft. Consolidation will help. Fewer large manufacturers may actually be able to force Microsoft to share the wealth. As it stands, Microsoft can charge about as much as a new PC for the software running on it. Not a recipe for long term success for what are in essence glorified system assemblers.

Reply Score: 3

Goodbye Dell
by segedunum on Tue 5th Feb 2013 21:41 UTC
segedunum
Member since:
2005-07-06

When a company goes private what happens is the investors get the company into debt to buy it and then rape the living daylights out of anything salvageable.

Reply Score: 2

why
by fran on Wed 6th Feb 2013 07:11 UTC
fran
Member since:
2010-08-06

PC's have become a low margin business.
Dell reinventing itself is going to mean painful long term surgery to the company which will place pressure on the stock and open it up for possible hostile takeovers and demands for management change by short sighted panicking stock holders.
As well as diluting current stockholders value.
This is probably the most honorable thing to do for a person/company who really care and belief in their company in difficult market situations.
Take it back before share trading or emotional shareholders ruin it.

Edited 2013-02-06 07:18 UTC

Reply Score: 5