Dell is going private with the help of $2 billion from Microsoft. Going forward, how much will Microsoft influence operations?
In an email, Carter Lusher, chief IT analyst at Ovum, said that Dell's decision to step away from Wall Street scrutiny could forecast "radical changes to its strategy and product roadmap." Lusher said that Dell's chief challenge will be communication with prospects and customers, and suggested that CIOs assess the risk to their infrastructure if Dell's evolving business could change their procurement plans.
Forrester analyst David Johnson wrote in a blog post that he is "bullish" on the deal, and that he sees no immediate cause for concern among customers. Johnson said that acquisitions have made Dell organizationally complex. He expressed optimism that the company would streamline its IP around "a handful of solutions that no other vendor could provide," and lauded the decision to go private, noting that such streamlining would be a "massive undertaking" for a public company. John said he does not expect Dell to drop its PC business.
Microsoft's role as an investor has also been the subject of speculation. Some reports claimed that buyout negotiations emphasized Microsoft's influence within a private Dell, and many wondered if Microsoft was trying to mandate that Windows play a prominent role in future Dell products. Such a requirement has not been disclosed, and Michael Dell has stated that Microsoft won't be a part of day-to-day activities.
Even so, it remains to be seen whether other OEMs will take issue with Microsoft's investment. The software giant's relationship to PC makers is allegedly already strained by Windows 8's mediocre start and Microsoft's decision to enter the hardware space with its Surface line. Others, though, have theorized that Microsoft is more interested in Dell's cloud, big data and virtualization technologies than in the company's PC business.
In his blog post, Forrester's Johnson said Microsoft could see a number of benefits, noting that Dell offers supply-chain expertise, capacity for PC hardware and a chance to better optimize that hardware for Windows. He also noted converged infrastructures for cloud as an area of opportunity.
Constellation Research analyst Ray Wang said in an email that "Microsoft is Dell's biggest backer." In addition to investing in the buyout, Redmond has also supplied Dell with marketing dollars, Wang noted, saying, "We see them very aligned … in the long run."
"Microsoft can't lose another hardware partner and HP is shaky," he wrote, ostensibly in reference to HP's recent Chromebook experiment. "Dell needs to be there."
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