Dell Goes Private

$24 billion deal. http://dealbook.nytimes.com/2013/02/05/dell-sets-23-8-billion-deal-to-go-private/?smid=tw-nytimesdealbook&seid=auto

As a newly private company — now more firmly under the control of Michael S. Dell, who is contributing his stake of nearly 16 percent to the deal — the computer maker will seek to revive itself after years of decline. The takeover represents Mr. Dell’s most drastic effort yet to turn around the company he founded in a college dormitory room in 1984 and expanded into one of the world’s biggest sellers of personal computers.

But the advent of new competition, first from other PC manufacturers and then smartphones and the iPad, severely eroded Dell’s business. Such is the concern about the company’s future that Microsoft agreed to lend some of its considerable financial muscle to shore up one of its most important business partners.

Days numbered, or will Dell turn it around? Do you foresee the company shaving off product lines?

If they bring back that poor man’s Jim Brewer stoner kid, I predict good things.

Dell attempted and failed to enter every single new market category for the past 20 years. They tried CD MP3 players, flash MP3 players, mini PCs, HTPCs, netbooks, all-in-one PCs, android tablets, smartphones, ereaders. wireless routers, you name it they tried it and failed miserably. The only hip category they didn’t try to enter was handheld video cameras ala Flipcam. I actually could have sworn they did but I couldn’t find links to it anywhere.

They had their computer business, but those started to suck too. My company had a couple hundred latitude laptops that would constantly overheat and clock down to 400Mhz. Dell wouldn’t replace all of them, instead we had to get each replaced individually as they failed.

They purchased alienware then proceeded to do nothing with it. It was just a boutique brand to justify higher prices. They completely halted innovating there too.

Dell just can’t seem to produce anything that wasn’t complete shit. It deserves to die.

Well, they do make nice monitors.

It’s funny – 7 or 8 years ago Dell actually managed to make decent PCs. I’m not sure what the hell happened, but stusser is right – they’ve actively sought to make themselves irrelevant to trying (I would say half-assedly) to get into various other markets while allowing their PC business to get worse and worse.

Will they turn it around? Frankly, given that Michael Dell led them through this decline, I’m not sure he even understands the problem, let alone how to turn it around. Hopefully I’m wrong, since I’d like to have at least one US-based company whose PCs don’t suck.

Their netbooks were nice, especially if you put OSX on them.

HP PCs aren’t bad for mass-market. There are quite a few boutique makers in the US that are fine, if overpriced.

We could get into a conversation over whether dell netbooks were fine for a low-end very short-lived category or whether they were even crap within that category, but I just don’t find that to be an interesting discussion.

I can say that Dell has been pushing the Hell out of their enterprise offerings for the past year or so. They’ve depended on bulk business orders for years now, but they only recently have been concentrating on storage, services, and enterprise hardware over their consumer lines.

They’re trying to shift from competing against Apple and the race to the bottom pricing of laptops and desktops to more lucrative B2B offerings. Of course, their competition there is IBM, HP, and Cisco.

Yes, but Dell’s enterprise offerings are shit.

They may be d0med, but there are others in worse shape. I know some IT people who like Dell servers.

I’m rocking a couple of 24-inch Dell Ultrasharps on my desk. That said, many of Dell’s wounds were self-inflicted, but Dell was also hurt by computing power finally plateauing. My four-year-old Dell i7 still handles everything I throw at it with ease. The days of needing to constantly upgrade have been gone for years. All the exciting advances in hardware are happening in mobile, but even that’s beginning to plateau.

Fascinating. I was not aware of any of that. Thanks for the link.

Agree with what you guys are saying about Dell’s decline - the company tried to basically become “technology Amazon” and never really got the traction, and their core PC business has declined as a result.

That said, I hope they pull it together, because even though their support/hardware quality isn’t what it used to be, they’re still a decent place to get an out of the box PC, and the ONLY gaming specialty company that supports Canada well. Alienware may not be the impressive boutique it once was, but their products are still really cool - my 2010 Alienware is still a lot of fun.

(that said, the harddrive suddenly died, and I replaced the video card).

Yeah, not perfect, but I still want them around, particularly for the Canadian market.

Without DELL the enterprise market for servers and desktops would basically consist of HP and Lenovo. Both companies have their issues, and DELL’s mere presence helps keep the market honest and competitive.

DELL needs to simply refocus on core products. They make some really nice monitors, and for a long time they were the #1 choice if you wanted quality desktops for your enterprise. They’ve always made well-designed and reliable servers, and still do. If they focus on all that plus laptops, and simply drop everything else, they’ll be fine. They also need to pare down the number of models of everything they offer. There really isn’t any reason to have 5 different product lines in desktops and 3 different lines of laptops. Make a couple lines of each, let users configure to taste, and cut your production costs.

What’s weird to me is the feeling that there hasn’t been anyone in charge at Dell for years, that’s its been a zombie organism running on inertia and each department fueled by corporate morale boosting lingo and nice enough working environment. At least there migh be something to this since getting control back is at least part of what he’s trying to do. It’s hard to tell. Dell has had so many half hearted forays into non PC markets that never seem to … it’s like they’re doing because they have to and never expect any of those efforts to succeed.

Eh? All the boutique computer makers ship to Canada. If you don’t like the Alienware… err… "aesthetic, they are a much better choice. Look for shops like Velocity Micro, Maingear, Puget Systems, etc.

At any rate, by going private, they can make the long-term bets and investments necessary to pull themselves out of this without having to answer to the insane demands of the stock market for short-term returns and unsustainable growth.

Vertical integration is the name if the game now, and it is hard to see where Dell fits in. Even more than Apple who has their Arm CPUs and iOS they’ve been a slave to what is available from Intel and co. In order to innovate and survive they’re going to have to manufacture … something. Not just assemble. Maybe that’s IP or service but something.

That’s where they’re trying to go in the enterprise market. I don’t think anyone other than Apple sees traditional desk/laptops as a profit center anymore.

Ouch. I’m not a big Dell fan, but even so, ouch.

God, I love The Onion.