4 Ways Microsoft-Dell Deal Could Benefit IT

What's in it for business customers if Microsoft invests $1 billion or more in Dell's buyout deal?

Kevin Casey, Contributor

January 23, 2013

4 Min Read

9 Bargain IT Tools For SMBs

9 Bargain IT Tools For SMBs

9 Bargain IT Tools For SMBs (click image for larger view and for slideshow)

A common question following reports that Microsoft might invest upward of $1 billion in Dell's potential deal to go private has been: What's in it for Microsoft and Dell? Their business customers -- and the IT pros that keep them up and running -- would probably rather know: What's in it for us?

There should be little risk to Microsoft and Dell shops, Forrester senior analyst David Johnson predicted in an email to InformationWeek. "I don't see any negative side of this for customers of either Microsoft or Dell yet, but we'll know more should it come to fruition," he said.

There could be some upside for IT, too. Let's look at four possible benefits.

1. A Better Microsoft.

Microsoft could use some help in critical business areas, according to Forrester's Johnson. Those include: "More expertise in design, manufacture, distribution and especially enterprise sales of Windows PC hardware; more dedicated focus across enterprise sales, software and services on Microsoft solution sets and platforms; [and] a stronger enterprise go-to-market channel for hardware," Johnson said. Owning a piece of Dell could help Microsoft better fill those needs.

[ Irascible CIO Stu Laura dishes on why private clouds rule. Read Why Private Clouds Will Prevail. ]

The hardware piece could be particularly important for Windows 8's eventual success -- or lack of it -- in the enterprise. Although Microsoft is touting strong licensing numbers for Windows 8 -- and raising non-volume upgrade prices accordingly -- early issues with Windows-based tablets and a relative lack of PCs purpose-built for Windows 8 could hamper adoption.

2. A Better -- And Easier -- Private Cloud Choice.

Johnson called this the "most important" potential outcome of a Microsoft stake in Dell: A top-notch option for private clouds that's much simpler to deploy and maintain than what's available today. Moreover, that option shouldn't necessarily suck up in-house resources, something that could appeal not just to enterprise IT but to small and midsize businesses (SMBs), too.

"In the face of VMware and others with respect to software-defined datacenters, converged infrastructures that unify not just different hardware domains like compute, network and storage -- but also the software to provision, operate and monitor it -- will be critical," Johnson said. "A Microsoft investment in Dell could really shake this up in short order."

3. Better Hardware For SMBs.

Techaisle analyst Anurag Agrawal echoed some of Johnson's thoughts on hardware and cloud, although with a focus on smaller IT shops. It could help Dell deliver better Windows-based tablets and other hardware over time, he noted. "The buyout investment will help Dell in building the PC-type products designed by the Microsoft team [for] the SMB segment, which [has] an insatiable appetite for tablets," Agrawal said via email interview. He pointed to Dell's current XPS lineup of convertible ultrabooks, for example, saying that it's a "great product" but not on a par with Apple's iPad or Microsoft's own Surface.

4. Better BYOD Tools.

A tighter Dell-Microsoft alliance as a result of a buyout deal also could affect the data center and employee-owned mobile devices, in part because of Dell's enterprise direct sales force and its extensive network of SMB channel partners, said Agrawal. "Microsoft could in all possibility be able to partner with and leverage this direct sales force and Dell's channel partner community to sell its own virtualization solutions for the data center, [along with] its tablet devices that are easily integrated with the business mobility solutions, to enterprises and SMBs," he said.

That could mean a new face in the Wild West landscape known as bring-your-own-device (BYOD). Microsoft could in effect "establish its own BYOD solution stack along with Dell Quest and therefore take business from VMware," said Agrawal. He is not concerned that a Microsoft-Dell deal might hurt Microsoft's relationships with other OEM vendors. "Does it really matter? Google bought Motorola Mobility but it did extremely well across all of its other OEM partners as well," he said.

Forrester's Johnson, though, noted a sideshow worth watching if a Microsoft-Dell deal comes to pass. "It would also put significant pressure on HP, who is already reeling from years of board-level mismanagement," Johnson said.

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About the Author(s)

Kevin Casey


Kevin Casey is a writer based in North Carolina who writes about technology for small and mid-size businesses.

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