My office has a bunch of the Precision line of laptops, and they’re solid machines in my experience.
Wow. That was almost like watching a heavyweight champ take on Glass Joe. The Onion is just awesome.
Anyway: I agree that Dell’s are solid machines, but I keep seeing what appears to be a shrinking market for them. Perhaps their size and dependency on corporate clients insulated them from the marketplace for too long and now they’re playing catch-up.
Interesting article on Slate opines that dodging taxes is one of the big drivers behind this deal:
The Dell deal is striking in this regard because the key mover is already the CEO, founder, and largest shareholder in the firm. In other words, while Michael Dell may have some new ideas about how the company should be managed, the deal is clearly not about wresting control of the brand from mismanaging incumbents. The idea is to keep the same leadership team in place, and rejigger the company’s financial structure rather than its way of doing business.
Dell’s cash stockpile and current profits ought to make it a valuable company despite its poor growth outlook. But before those profits or cash holdings can be paid out to shareholders as dividends, they would have to be “repatriated” to the United States. Then a 35 percent corporate income tax would be levied, and only then would shareholders get their money.
A leverage buyout offers a workaround to avoid many of these taxes. Shareholders make money directly as their shares are bought back at a premium. Much of the money that would go to buy the shares would be borrowed from banks, who’ll earn a profit of interest payments. Those interest payments can be made, in part, with the repatriated cash. Except this time the cash would not be taxed, since interest payments on corporate debt are a tax-deductible expense. Like magic, Dell’s shareholders would be extracting money from the firm without giving Uncle Sam nearly as big a cut.
We use Dell on the desktop and servers. We had switched to HP on the desktop a few years ago but it turned out to be a bad decision. Their quality is poor, and they overheat. We switched back to Dell. The Help Desk guys complained HP’s phone support was absolutely terrible.
On the server side, the real win for Dell is their global presence. You want to buy an HP server in China? Good luck. Your HP rep will find a VAR in China. Within a week or so. Maybe. You’ll also have to find different VARs to compare prices. Dell? You call Dell and it’s no problem.
Support is also a nightmare for HP. Again you’re at the mercy of whatever local shop or VAR HP uses for support. With Dell, you call Dell-China and Dell rep will come onsite and replace the part. That applies to Malaysia and Mexico, too. Yeah, Dell support isn’t perfect. You call Dell-US for a server they know was sold in China and they’ll tell you to call Dell-China. But it’s a huge, huge improvement over HP.
I like Dell high-end laptops and workstations. I moved from old IBM laptops to Dells and they are comparable.
I think that’s the problem. The market for desktops and laptops isn’t a growth market. Not sure what Dell can do about that. Maybe they will make Windows 8 tablets and hope those take off.
Dell is making a windows 8 tablet, but like all their other branch efforts it sucks rocks.
You pay massive import taxes on any of those, other than Dell, which has a Canadian operation. My Velocity Micro system had a mere $800 import surcharge, for instance. Yeah, that was the last of those.
We used to have a couple thousand Dell servers at my webhosting company, they were great bang for buck but by no means were they refined. We’re HP at my current job, and they are much, much more reliable and much more expensive.
The easiest thing to say about any sort of change at Dell right now is, “It can’t hurt.”
Oh, wow, I had no idea it was that high. Obviously there are ways to get around that, but it seems like a lot of trouble.
“What would I do? I’d shut it down and give the money back to the shareholders.” – Michael Dell, October 6, 1997, when asked what Steve Jobs should do to fix Apple Computer.
Well, he’s putting his money where his mouth is, at least. Dell shareholders got a nice premium.
Yeah, so basically Dell is still a pretty profitable business. It’s just not a fabulously profitable business (aka, Apple), but the problem is that since it’s a publicly-traded computer maker (like Apple), it constantly gets compared to Apple. And it’s a comparison that makes Dell look absolutely terrible in comparison.
Going private lets Dell make money without hearing the constant complaints from shareholders/press that it’s not making anywhere close to what Apple is making.
Interestingly, MS quietly explored the possibility of going private last year, too. It’s still making a ton of money, but the fact that its stock hasn’t really budged in over 10 years (despite revenues doubling) has led to a lot of grumbling amongst analysts, shareholders, the press, and employees. And the constant comparisons to Apple and Google are starting to wear on the folks in charge.
What’s the source on the MS thing?
This is said in some article I’ve lost track of to be the whole point of the deal. By taking the company private, a great deal of tax is avoided that would otherwise be levied if the shareholders were to be paid off while the company was public.
I wish they’d make up their mind…
So M. Dell is ready to cash out?
Interesting because I was trying to think of possible stocks I would like to invest in lately using my work for ideas. What were companies that my company seemed to do a lot of business with? Dell was one of the first to come to mind. Working for the government and now a multinational corporation, one thing is in common with both of them: They get most, if not all, of their computer stuff from Dell. I know that doesn’t mean Dell is a good investment if they did go public again, but they seem to have a large market share and staying power.