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back to article Dell finally takes Dell private - with $24bn and help from Microsoft

Stumbling computer-maker Dell Inc will leap from the stock market and go private in a $24.4bn buyout. Ever since Michael Dell founded the company in a dorm room at the University of Texas in 1984, the firm has enjoyed a fabulous ride. But it struggled this side of the year 2000 as the PC lost its lustre. The tech titan then went …

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Microsoft?

Getting in to bed with Microsoft is never a good idea.

People learn from their mistakes ..... clever people learn from other peoples mistakes

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Happy

Re: Microsoft?

Michael Dell is a shrewd cookie and the Microsoft involvement appears to be a loan, ergo not direct equity or ownership. He knows what he's doing and has in my view held the upper hand in all events and will continue to drive his vision for Dell and not that of others.

Microsoft is not into his bed but on the floor at the foot of his bed, desperately clinging to his sheets....

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Anonymous Coward

Re: Microsoft?

It didn't do Apple any harm!

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Anonymous Coward

Re: Microsoft?

Why would someone go private to get less control over their destiny?

If you're going to be anti-M$ at least make sense.

Dell are looking to get into services more like IBM.

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Re: Microsoft?

True, but I always saw that as a pity move. Of course MS didn't want Apple to go away, look at how dominant MS was at the time and how pathetic Apple was. Me thinks MS wish they had held on to those shares, eh?

Then again, did MS buy shares in Apple or was it Bill Gates?

Cant' remember, doesn't matter, (Oh, but I'm sure someone will quote me wrong and give a boring detail of computer history)

This is different though, this is symbiotic. MS has a lot to loose if Dell stumbles and falls. And remember, they've still gotta have the PC makers to blame for Windows 8.

The tablet market is booming, but MS and Dell are still from the old world, where what they make is PC based. Does Dell make a Windows 8 tablet now? don't know, don't care. Will they? Hell yeah!

Will anyone buy it? don't know. But like all companies, there comes a time when you need to give the consumer what they want, not what you think they need or what you want to give them.

Dell is the old Apple, either they will shrivel up and die, remain the same, or become something no one expected. Apple did evolve. time for MS and Dell to do the same.

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Trollface

Re: Microsoft?

you are correct. There are literally hundreds of examples of people partnering with MS and either getting bought and obliterated or being stabbed in the back as MS steals their know-

-----------------------------------------------

Name..... say ten

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Boffin

Re: Microsoft?

So whats your current net worth?

Is it more than Mr. Dell?

I didn't think so.

Nuff said, so stop wasting our time with your self righteous opinions.

Just because your mommy says your clever.....does not make it fact.

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Megaphone

Re: Microsoft?

Hmm. Let's see if Dell still has the technological know-how to put together a decent PC, like he used to. It has been many years since he was putting machines together in his dorm room...has he kept up on the latest technology, despite his immense fortune?

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Re: Microsoft?

"MS has a lot to loose if Dell stumbles and falls."

Maybe a quick tighten is all that is needed then.

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Mushroom

Re: Microsoft?

Like Microsoft's investment in Apple for instance?

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Facepalm

Re: Microsoft? - Companies eaten or otherwise destroyed

Ahh Wikipedia... must all be true then

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Headmaster

Interesting that Dell referred to Silverlake and did not say anything about MS.

It is plain that he knows who his most important partner is even if some of the usual suspects here are totally obsessed with Redmond's involvement. I suggest that everyone just takes a pause and waits to see how this pans out.

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FAIL

Re: Interesting that Dell referred to Silverlake and did not say anything about MS.

You don't need to be a genius to see how any comment from Eadon will pan out. Even if the article is about astronomy.

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Mushroom

Re: Interesting that Dell referred to Silverlake and did not say anything about MS.

You mean Microsoft getting involved and Nokia very quickly heading back in the black and making a profit?

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Re: Microsoft picks its preferred OEMs. Biz model EPIC FAIL.

Microsofts investment and partnership with Apple worked out really badly for Apple didn't it?

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Re: Microsoft picks its preferred OEMs. Biz model EPIC FAIL.

"Now MS is taking some control over DELL."

No, that's not correct. As The Godfather above noted MSFT is giving a loan (I assume subordinated debt to Silver Lake, but I have not read the offer, or studied the structure of the new Dell) to the "Private" Dell to allow it to give to give cash to the extant shareholders in return for them surrendering their shares back to Dell.

Loans do not usually give much control. It may draw the two "closer" and it will expose MSFT to some risks; it is far less likely than Silver Lake to be repaid should Dell go titsup for example. In return it will probably have a higher interest rate on the loan. These two loans are the "lever" in "leveraged buyout".

You need to understand that a loan is not an equity stake. Equity owners own the business. Lenders own a bag of debt. I am sure MSFT will take a keen interest in how Dell is doing, but a loan does not necessarily give any form of control, especially if you are the junior lending partner. It may be that under the loan agreement MSFT gets some form of board representation, but if they start to irritate Silver Lake or Dell, then finding another willing lender and getting rid of them would be much easier (albeit not cheap) than removing a truculent stockholder.

As for the decline of MSFT, it may happen, it may not. My personal view is that its star will fade, it needs a new way of thinking having called various things very badly wrong. I doubt that such a decline will happen overnight. MSFT's best hope is to rid itself of Balmer and put someone with a clue about the future and how to nurture talent and IP in there. MSFT has huge, vast resources of talent (oh yes and cash), but all of that means nothing if it is misdirected. Ballmer, to coin an phrase, if he has a plan, is behaving very much like a man without one. MSFT needs change, it needs to stop, think, and actually make things people lust after, not just have to have because they are in some upgrade cycle of hell.

A severe change of management and direction would be a Good Thing(TM).

TLDR:- Loans are not equity. MSFT does not control Dell now. Ballmer is a poor CEO.

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Re: Microsoft picks its preferred OEMs. Biz model EPIC FAIL.

@myself - read the article properly.

MSFT gives a loan, SL gives cash for equity. Control is with Silver Lake and Mr Dell.

Not MSFT. So, if Dell goes titsup MSFT gets paid ahead of SL. But MSFT does not own a "stake" in Dell, and earns interest on the loan. The loan may or may not be secured. There may or may not be other contributing parties.

Most of the rest of my babbling is correct, just ignore the bits about SL giving a loan.

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Re: Microsoft picks its preferred OEMs. Biz model EPIC FAIL.

Loan or not - if somebody lends you $2Bn you can bet they are going to offer some helpful suggestions about how to run your business

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Mushroom

Re: Microsoft picks its preferred OEMs. Biz model EPIC FAIL.

"long predicted" versus "surprisingly quickly" does not compute.

nb - Microsoft's share of the mobile market is rising quicker than anyone else's.

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WTF?

Re: Microsoft picks its preferred OEMs. Biz model EPIC FAIL.

"...and they will even consider making Linux distros or using existing Linux distro's on their desktops - and actually market these ..."

Right, finally the year of the Linux Desktop! Also, about the "other desktop OEM's ...flock to ChromeOS" bit, I point you towards the tablet sector of the PC market, they are doing quite well serving people who just want a shiny browsing box (and portable too!). Light years separate Chrome from a functional desktop OS.

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eh?

"As Eadon has long predicted here, Microsoft will collapse surprisingly quickly."

isn't that an oxy-moron.....Long predicted, and surprisingly quickly...

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Anonymous Coward

Re: eh?

No, HE'S an oxymoron!! Hahahaha, oh, as you were...

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Re: eh?

Yes, but you always predict the death of Microsoft and recommend people to go join your beloved data-stealing Google every time you post anything at all.

Frankly, it's boring.

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Re: eh?

Yeah but he's probably predicted that its boring!

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Re: eh?

>I long predicted that MS would go from being dominant to insignificant over a short duration.

I don't think this is a sign they are being insignificant - it's a sign that they are becoming a significant company in the hedge fund business.

If you have $50Bn in the bank, why waste money trying to write software when you can make a lot more $$$ investing in other companies ?

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Re: eh?

beep beep beep Eadon reversing

beep beep beep Eadon reversing

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So Dell is the new Nokia.

I am guessing that all that work with the linux developer ultrabook is going to go right out the window. Along with getting a Dell machine without paying the Windows tax at any point in the future.

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WTF?

Huh?

How would Dell will be the new Nokia?

There's literally NOTHING common in Nokia's situation when MSFT Trojan horse Elop took over the chief beancounter role and quickly managed to destroy around 50% of Nokia's value with an incredibly retarded business decision, topped off by the industry stupidest press release vs a profitable Dell taking its own fate into its namesake's hands from the market, using some change from MSFT... you're not making any sense, I'm afraid.

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Mushroom

Better buy some shares in Dell then. Oh wait....

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Mushroom

Re: Huh?

Actually Nokia make a decent profit last quarter - and Lumia / Microsoft sales and the money provided by Microsoft are a large part of what turned them around....

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FAIL

Re: Huh?

TheVogon barfed: "Actually Nokia make a decent profit last quarter - and Lumia / Microsoft sales and the money provided by Microsoft are a large part of what turned them around...."

"Made a profit"and "turned around" - WTF? ... dear God, a classic PR BS - you should really check your facts again instead of relying the MSFT Trojan Horse-led team's dogfood press releases... let me quote myself from an earlier thread:

You meant the profit

1. ...that shows up after MS' BEEEELLION-dollar 'investment' in Nokia's new, (even at deeply discounted price) badly-selling WP phones?

2. ...then even with MS' BILLIONS at play Elop had to cancel dividends?

3. ...wield the axe so seriously that almost the entire sw development team was laid off?

4. ...in order to make up the difference that Nokia's REVENUE ACTUALLY DECLINED 20%...?

5. ...with their (Windows Phone-based) SMARTPHONE SALES FALLING OFF A CLIFF WITH 55% DOWN???

To sum it up: you can cut costs, fire people, even cancel dividend payouts as Elop, this MS-parachuted faux operator just did and you can try claiming you made a profit...

...but if it comes on the heels of revenues falling off a cliff and completely collapsing sales in your #1 market segment then everybody knows YOU ARE ON DEATH ROW, just like Nokia is and nothing "turned around"...

...unless your strategy was slowly killing off the company in the first place - something many of us suspected from the beginning, that it's a win-win game for MSFT, to either have an exclusive phone partner to push their lousy phone OS into the market or just bring down the price and have MS pick up Nokia's excellent hardware division and its distribution operations for the ashtray change of Ballmer...

...because there's no other sane explanation of this corporate ***kicker's actions: what kind of an utterly incompetent, clueless idiot would announce a YEAR AHEAD that he is dropping the company's ENTIRE portfolio, rendering ALL his current products completely toasted overnight, causing a 30-40% IMMEDIATE DROP in the company's value, seriously?

Elop is either the most incompetent, useless corporate shitkicker in a decade or a paid MSFT scumbag executing a takedown from the inside - take your pick.

Either way, Nokia is busted, period.

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Angel

Dell has partnered with Microsoft from the very beginning, co-investing in products, research, marketing and more. Move along, this isn't the news you were looking for.

For what its worth, bundling software on servers, Linux or otherwise is pretty much a waste of time, most customers wipe it when they get it. As a percentage of servers sold I'd guess we(Yes thats right I work for Dell the man) ship way more servers without software than with. ELA's are where it's at.

Whats more interesting is the macro level actions, as TPM says, what will be different from what the company will do differently than it would have as a public company. I know internally that the talk of the PC collapse true or not, was a distraction to what we've been doing to re-invent Dell in the last 3-years.

Coincidentally, I registered to attend the upcoming Linux Collaboration summit yesterday. ++Mark.

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@Mark Cathcart

ship way more servers without software than with.

So you just admitted that Linux is more popular on your servers than MS Windows.

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Re: @Mark Cathcart

So you just admitted that Linux is more popular on your servers than MS Windows.

No, they admitted that most Dell customers don't want to pay for the retail versions of the OS's Dell offers. People with Microsoft volume licensing probably fit in that category as well.

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Mushroom

Re: @Mark Cathcart

Microsoft has ~ 55% of the x86 server market. The rest taken up by Solaris, Linux, Novell, etc.

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Re: Difference between Partnering and Ownership - DELL FAIL

I can't speak for competitors and what they will do, I guess formally I can't speak for Dell, I'm certainly not about to start speculating. However, if you read the announcement, the money from Microsoft was a LOAN.

I know everyone likes a failure, predicting failure is even more fun, although it comes at a price sometimes, as my boss knows. It's much more fun to be involved in creating success and Dell the man has been great and certainly motivating in the 3-years that I've been here...

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Re: Difference between Partnering and Ownership - DELL FAIL

Eadon, you can whip yourself into a frenzy, this really isn't the interesting part of the deal Yes, I've seen the official HP Statement, I'm guessing more scare tactics will follow, either imagined or real.

Still, I've said enough, got to get on with creating the future...

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Headmaster

Re: Difference between Partnering and Ownership - DELL FAIL

Why do people seriously think MS will try to destroy Dell? Dell is one of the biggest customers of MS. It's the same with the theory that MS are trying to kill Nokia: if Nokia die, Windows Phone is doomed, and so MS is doomed as well.

It's so silly it cannot seriously be considered.

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Alert

Re: Difference between Partnering and Ownership - DELL FAIL

Dell makes money from Linux servers

Mark Cathcart said above (a Dell employee, no less) that Dell makes money from bare metal. Not linux servers. Not Windows servers. Bare metal.

IOW, your whole premise is just the usual wish-fulfillment bullshit.

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Who's panicking?

Dell or MS?

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Childcatcher

Re: Who's panicking?

MS will be rubbing their hands together thinking **Interest Payments**

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