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Dell's Future: 3 Wild Cards CIOs Should UnderstandDell's Future: 3 Wild Cards CIOs Should Understand

As Dell pursues going private, Microsoft's $2 billion stake isn't the only thing that should give enterprises pause.

David Rutchik

February 12, 2013

1 Min Read

Businesses that have an existing service provider relationship with Dell should:

-- Assess their termination options. Whether or not you're unhappy, the limited buyout will trigger termination for change of control provisions that should be part of any well-constructed ITO agreement. Whether termination is a desired -- or even operationally viable -- option aside, simply having the right to terminate with less cost and impact than a termination for convenience will provide the leverage needed to renegotiate unfavorable provisions or force attention on service levels. -- Maintain lines of communication. As new stakeholders develop and implement strategy, Dell may have a dynamic operating environment. In particular, shifting priorities may impact lines of business and supporting organizations that are important to you. Speak with your relationship manager regularly to discuss how planned changes will affect your agreement and how to mitigate any negative effects. Good governance is critical. -- Monitor neutrality. With Microsoft as a major investor in the privatization bid, Dell's system designers may be under pressure to incorporate more of Redmond's technology. Watch for any proposed changes to your architecture and raise a flag if Dell replaces previously open-source or other vendor systems or components with Microsoft-oriented technologies. -- Pay special attention to service levels. Systemic corporate change can wreak havoc on employee focus and stability, with potentially disruptive near-term impacts for customers. Monitor performance metrics and keep in touch with critical Dell contacts especially closely during the transition period to ensure your operations are not negatively impacted.

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About the Author(s)

David Rutchik


David Rutchik is a partner with outsourcing advisory firm Pace Harmon, where he represents multiple Fortune 500 clients in their outsourcing, offshoring, strategic sourcing and other critical business transformation initiatives.

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