back to article A private Dell makes sense. Doesn't mean it'll work, though

So now that Dell the man has spaffed $24bn (with a little help from his friends) on buying back Dell the company, what is Michael D actually going to do with it? And why has he had to take it private in order to do it? What is there that you cannot do on a public stock exchange that you can do as a private company? The first …

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  1. Anonymous Coward
    Anonymous Coward

    A company of commodity box shifters.

    Much of the value in computing is now in the software and services they can deliver so Dell need to realise this.

  2. Anonymous Coward
    Anonymous Coward

    I remember Dell, from about 10 years ago. They used to make reasonable PCs. Didn't realise they were still around.

  3. Horridbloke

    Reminds me of another company...

    This "handling" of their suppliers.... Are Dell the Tesco of IT?

  4. btrower

    Makes perfect sense

    Re:"the price demanded was sufficiently low that Dell and Silver Lake make money either way"

    Regardless of what they are planning on doing or what reason they think they had to take the company private, the low price is what was driving this.

    Michael Dell has a good track record. He knows about making money. The company itself may crater, but I expect Mikey will do just fine with this deal.

    Now that the company is private there are all kinds of things that they can do. Being fleet of foot for a company with this kind of critical mass is a very good thing. This should also be a lot of fun. There are lots of really cool things you can do when you control billions of dollars and tens of thousands of people.

  5. Joe Gurman

    YMMV

    My experience with Dell has been almost exclusively from working at a US government agency, and purchasing from Dell's federal Website. Unfortunately, that is an experience known to make grown men weep, and grown women want to throw their keyboards at their monitors.

    Rather than list a litany of shortcomings of the site, or compare it to admirably simpler ones, such as Apple's federal site, I can summarize the repeated experience of not being able to configure what I needed (but knew they offered, somewhere), contacting a variety of sales personnel who were way for indeterminate periods and might or might not offer a substitute's phone number on their voicemail, dealing with sales personnel whose most frequent response was to shift my call to someone else, and finally getting to a sympathetic ear that was unable to help me, either, after several days for a simple server config as "You really don't seem to want our business, do you?" "[Sighs] It seems that way, doesn't it?"

    I really hope they treat SMEs better than that; there's nothing wrong with their kit (other than a lack of USB 3 ports on their servers and an insistence on forcing more expensive SAS drives when cheaper SATA devices would be just fine).

    1. Tim Worstal

      Re: YMMV

      25 years ago I did some phone work for Dell as a contractor in the UK. And it was exactly the same then.

  6. Lynrd

    Missing the point

    Focusing on the myriad shortcoming of Dell is missing the point. Michael Dell is a true innovator - but not in technology, rather in financial models. He pioneered the "Negative cash conversion cycle" and made it possible to do financial magic - manufacture products in such way that it was possible to sell below cost and still make money - not an easy trick. Several business schools teach courses on the Dell model.

    It so happened that for his time in history, the PC was the best platform to exploit that model, and so he ended up in the PC business. In some other age, it might have been buggy whips. Between the negative cash conversion cycle and the direct model of Sales, he built a very successful company.

    However, almost point for point, Dell in latter years has abandoned all of the practices that made them a multi-billion dollar company. First off, they attempted to embrace the channel, which is absolutely counter to the culture of the company in the first place (Please read Michael's book "Direct from Dell" for more on that) . Simultaneously, they stopped being a manufacturer and instead have shifted to an ODM model for the core products of servers and PCs.

    I have no doubt Michael has a plan. I also have no doubt that he believes his plan would not be workable if he must show quarter on quarter growth to the street. I suspect the plan will not bode well for current resellers, and, if I hadn't already left the company, I would be taking the golden handshake now to get out. I am anticipating a big round of arbitrage where Dell spins off a bunch of the underperforming questionable acquisitions it made over the last few years - and there will be collateral damage across the company when that show starts. I also anticipate the channel teams will be cut further than they already have been. We're already seeing the Dell direct teams taking deals away from the channel daily - Sales upper management never really saw the value of channels , they have drunk the "Dell Direct" Kool-Aid too long.

  7. FionaJC

    Michael might be good at financial modeling for which Dell hardware was a vehicle but customer service? never a Dell priority and never managed. If you are going to provide a service then you have to know how to provide a service. HP and IBM new this from the very start but the road to today is littered with those that fell by the wayside trying to convert their model away from box shifting.

    I find the most interesting thing is that the whole article talks about shrinking and less , the Dell model will not work in a shrinking market so I suspect that Dell will close sometime in the future. or sell to a manufacturer such as Lenovo who would love to become an Apple. Being a private company allows moves that could be blocked in a public company. Watch this space, there ain't no money in box shifting hardware, unless you are named after a popular fruit that is.

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