back to article Dell finally takes Dell private - with $24bn and help from Microsoft

Stumbling computer-maker Dell Inc will leap from the stock market and go private in a $24.4bn buyout. Ever since Michael Dell founded the company in a dorm room at the University of Texas in 1984, the firm has enjoyed a fabulous ride. But it struggled this side of the year 2000 as the PC lost its lustre. The tech titan then …


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  1. djstardust
    Thumb Down


    Getting in to bed with Microsoft is never a good idea.

    People learn from their mistakes ..... clever people learn from other peoples mistakes

    1. The Godfather

      Re: Microsoft?

      Michael Dell is a shrewd cookie and the Microsoft involvement appears to be a loan, ergo not direct equity or ownership. He knows what he's doing and has in my view held the upper hand in all events and will continue to drive his vision for Dell and not that of others.

      Microsoft is not into his bed but on the floor at the foot of his bed, desperately clinging to his sheets....

      1. lightknight

        Re: Microsoft?

        Hmm. Let's see if Dell still has the technological know-how to put together a decent PC, like he used to. It has been many years since he was putting machines together in his dorm room...has he kept up on the latest technology, despite his immense fortune?

    2. Anonymous Coward
      Anonymous Coward

      Re: Microsoft?

      It didn't do Apple any harm!

      1. Anonymous Coward
        Anonymous Coward

        Re: Microsoft?

        True, but I always saw that as a pity move. Of course MS didn't want Apple to go away, look at how dominant MS was at the time and how pathetic Apple was. Me thinks MS wish they had held on to those shares, eh?

        Then again, did MS buy shares in Apple or was it Bill Gates?

        Cant' remember, doesn't matter, (Oh, but I'm sure someone will quote me wrong and give a boring detail of computer history)

        This is different though, this is symbiotic. MS has a lot to loose if Dell stumbles and falls. And remember, they've still gotta have the PC makers to blame for Windows 8.

        The tablet market is booming, but MS and Dell are still from the old world, where what they make is PC based. Does Dell make a Windows 8 tablet now? don't know, don't care. Will they? Hell yeah!

        Will anyone buy it? don't know. But like all companies, there comes a time when you need to give the consumer what they want, not what you think they need or what you want to give them.

        Dell is the old Apple, either they will shrivel up and die, remain the same, or become something no one expected. Apple did evolve. time for MS and Dell to do the same.

        1. Andrew Moore

          Re: Microsoft?

          "MS has a lot to loose if Dell stumbles and falls."

          Maybe a quick tighten is all that is needed then.

    3. GotThumbs

      Re: Microsoft?

      So whats your current net worth?

      Is it more than Mr. Dell?

      I didn't think so.

      Nuff said, so stop wasting our time with your self righteous opinions.

      Just because your mommy says your clever.....does not make it fact.

    4. TheVogon

      Re: Microsoft?

      Like Microsoft's investment in Apple for instance?

  2. Arctic fox

    Interesting that Dell referred to Silverlake and did not say anything about MS.

    It is plain that he knows who his most important partner is even if some of the usual suspects here are totally obsessed with Redmond's involvement. I suggest that everyone just takes a pause and waits to see how this pans out.

  3. Stuart Ball


    "As Eadon has long predicted here, Microsoft will collapse surprisingly quickly."

    isn't that an oxy-moron.....Long predicted, and surprisingly quickly...

    1. Anonymous Coward
      Anonymous Coward

      Re: eh?

      No, HE'S an oxymoron!! Hahahaha, oh, as you were...

  4. James 51

    So Dell is the new Nokia.

    I am guessing that all that work with the linux developer ultrabook is going to go right out the window. Along with getting a Dell machine without paying the Windows tax at any point in the future.

    1. Levente Szileszky


      How would Dell will be the new Nokia?

      There's literally NOTHING common in Nokia's situation when MSFT Trojan horse Elop took over the chief beancounter role and quickly managed to destroy around 50% of Nokia's value with an incredibly retarded business decision, topped off by the industry stupidest press release vs a profitable Dell taking its own fate into its namesake's hands from the market, using some change from MSFT... you're not making any sense, I'm afraid.

      1. TheVogon

        Re: Huh?

        Actually Nokia make a decent profit last quarter - and Lumia / Microsoft sales and the money provided by Microsoft are a large part of what turned them around....

        1. Levente Szileszky

          Re: Huh?

          TheVogon barfed: "Actually Nokia make a decent profit last quarter - and Lumia / Microsoft sales and the money provided by Microsoft are a large part of what turned them around...."

          "Made a profit"and "turned around" - WTF? ... dear God, a classic PR BS - you should really check your facts again instead of relying the MSFT Trojan Horse-led team's dogfood press releases... let me quote myself from an earlier thread:

          You meant the profit

          1. ...that shows up after MS' BEEEELLION-dollar 'investment' in Nokia's new, (even at deeply discounted price) badly-selling WP phones?

          2. ...then even with MS' BILLIONS at play Elop had to cancel dividends?

          3. ...wield the axe so seriously that almost the entire sw development team was laid off?

          4. order to make up the difference that Nokia's REVENUE ACTUALLY DECLINED 20%...?

          5. ...with their (Windows Phone-based) SMARTPHONE SALES FALLING OFF A CLIFF WITH 55% DOWN???

          To sum it up: you can cut costs, fire people, even cancel dividend payouts as Elop, this MS-parachuted faux operator just did and you can try claiming you made a profit...

          ...but if it comes on the heels of revenues falling off a cliff and completely collapsing sales in your #1 market segment then everybody knows YOU ARE ON DEATH ROW, just like Nokia is and nothing "turned around"...

          ...unless your strategy was slowly killing off the company in the first place - something many of us suspected from the beginning, that it's a win-win game for MSFT, to either have an exclusive phone partner to push their lousy phone OS into the market or just bring down the price and have MS pick up Nokia's excellent hardware division and its distribution operations for the ashtray change of Ballmer...

          ...because there's no other sane explanation of this corporate ***kicker's actions: what kind of an utterly incompetent, clueless idiot would announce a YEAR AHEAD that he is dropping the company's ENTIRE portfolio, rendering ALL his current products completely toasted overnight, causing a 30-40% IMMEDIATE DROP in the company's value, seriously?

          Elop is either the most incompetent, useless corporate shitkicker in a decade or a paid MSFT scumbag executing a takedown from the inside - take your pick.

          Either way, Nokia is busted, period.

    2. TheVogon

      Better buy some shares in Dell then. Oh wait....

  5. Mark Cathcart

    Dell has partnered with Microsoft from the very beginning, co-investing in products, research, marketing and more. Move along, this isn't the news you were looking for.

    For what its worth, bundling software on servers, Linux or otherwise is pretty much a waste of time, most customers wipe it when they get it. As a percentage of servers sold I'd guess we(Yes thats right I work for Dell the man) ship way more servers without software than with. ELA's are where it's at.

    Whats more interesting is the macro level actions, as TPM says, what will be different from what the company will do differently than it would have as a public company. I know internally that the talk of the PC collapse true or not, was a distraction to what we've been doing to re-invent Dell in the last 3-years.

    Coincidentally, I registered to attend the upcoming Linux Collaboration summit yesterday. ++Mark.

    1. eulampios

      @Mark Cathcart

      ship way more servers without software than with.

      So you just admitted that Linux is more popular on your servers than MS Windows.

      1. An0n C0w4rd

        Re: @Mark Cathcart

        So you just admitted that Linux is more popular on your servers than MS Windows.

        No, they admitted that most Dell customers don't want to pay for the retail versions of the OS's Dell offers. People with Microsoft volume licensing probably fit in that category as well.

      2. TheVogon

        Re: @Mark Cathcart

        Microsoft has ~ 55% of the x86 server market. The rest taken up by Solaris, Linux, Novell, etc.

  6. Tom 7 Silver badge

    Who's panicking?

    Dell or MS?

    1. Captain Scarlet Silver badge

      Re: Who's panicking?

      MS will be rubbing their hands together thinking **Interest Payments**

      1. TheVogon

        Re: Who's panicking?

        Agreed - you don't loan money without a premium on the perceived risk. Or something else in return...

  7. Anonymous Coward

    A Loan from MS !

    When you sup with the Devil, use a long spoon.

    I hope Michael Dell is well versed with Faust.

  8. bag o' spanners

    Dell is a weak player in a tough market, and my uneducated guess is that MS stuck a fork in it to stop other major players carving a big hardware firm for peanuts when it files for Chapter 11 in a couple of years.. The companies who could afford to buy Dell with their chump change are all capable of putting a big stompy boot into MS's profitable market segments. A firesale of the physical assets would probably cover the cost of the deal going tits up, and the bonus for MS is that they can lock Dell into Win8 at a time when all the other big OEMs are giving it a big "meh!". The stock will probably find a nice soggy median now that there's hard money behind it.

  9. Anonymous Coward
    Anonymous Coward

    Is he going to shut it down?

    He should take his own advice he gave about Apple in 1997..

    "What would I do? I'd shut it down and give the money back to the shareholders."

    1. Anonymous Coward

      Re: Is he going to shut it down?

      Hell, I was wondering if he terminal cancer and wanted to fuck everyone in the world at once.

      What a better way to do it than a loan from Microsoft.

  10. Anonymous Coward
    Anonymous Coward

    Loans from Microsoft

    ...because a Microsoft loan/investment worked out so badly for Apple...

  11. Anonymous Coward
    Anonymous Coward

    Dell is done

    Dell has been on the decline for awhile. It's just a matter of time before the chattering class realize it. Eadon is right, they're definitely on a Nokia-like glide path to oblivion. Still, I've got no problem with MS getting the blame.

    As for open source, Dell has always been ambivalent about it. Up until a week ago my main workstation at home was an old Dimension 5150n running Scientific Linux. They had a great idea with the n series machines but obviously caved to pressure from MS as the whole netbook industry did. That's now been replaced by a Lenovo ThinkCentre that really is a well designed piece of kit. When time comes to refresh the kids' machines I'll probably go with Lenovo, particularly if I can pull off getting them to accept Linux as their primary OS.

  12. JDX Gold badge

    How's it work?

    What if not everyone wants to sell? Do they only have to get a majority and can then force everyone to sell? Will every single share owner get a letter asking them about this?

    Wouldn't it make sense for DELL to come up with a few bits of REALLY bad news to depress their share price first...?

    1. Anonymous Coward
      Anonymous Coward

      Re: How's it work?

      Yes, he only has to convince a certain percentage (I don't know how far above 50% it is).

      If he does 'something' to affect the share price, he gets investigated by the SEC. and Silverlake send a couple of guys around to break his arms and legs.

    2. TheVogon

      Re: How's it work?

      He is buying at roughly the lowest share price ever if you take off the 20% premium....

  13. Anonymous Coward
    Anonymous Coward

    Dear El Reg...

    Please get rid of the pop-over ads, and please tells ArcServe that, because their ad selfishly blocked my reading of this article, this reader - who signs off on a very large infrastructure budget - will now never use their services.

    1. TheVogon

      Re: Dear El Reg...

      CommVault is the way to go...

  14. Wanda Lust

    Lawyers and shoes

    So, do they all wear white shoes at the law firm?

  15. pete 22

    Dell buying himself

    If Dell keeps buyinhg himself, he's gonna go BLIND!!

  16. Grikath


    Michael Dell is actually doing the smart thing, and is trying hard to divorce the fate of the company from the current vagaries and shenanigans of Wall Street.

    This is just crystal ball-gazing, but as a private company Dell comp. can deploy strategies that are far more riskier (or gutsier, depending on taste) than your avarage datacenter algorythm is familiar or comfortable with. It also prevents the company, which in and of itself is still healthy and profitable, from being shredded up by a stock panic.

    There's some serious money involved here, and Michael Dell is not a st00pid man. Despite Eadon's hearty and amusing screams, I have a feeling there's an actual long term strategy behind this move. A risky one that goes against the grain of common business practice, but which might well pay off.

    As always, only time will tell.

  17. Anonymous Coward
    Anonymous Coward

    Silver Lake..?

    Be afraid Dell employees, be very afraid.

    1. Anonymous Coward
      Anonymous Coward

      Silver Lake SCO and MS ..

      "An alert reader noticed that Integral Capital Management companies just filed a 13G with the SEC regarding its shares in SCO .. As of last December, Integral Capital Management V didn't own any SCO stock, according to this SEC filing. They did own Microsoft stock back in November. But they didn't the previous May of 2002. So the chain of investment timeline appears to go like this: First, they invested in, then Microsoft, and then in SCO".

      "Small world, isn't it? But why? A venture capital firm is investing in Microsoft? Doesn't it seem like it should be the other way around?"

      "In 1999, Integral Capital Partners co-founded and now operates as a managing principal of Silver Lake Partners, a $2.2 billion buyout fund focused on technology and related growth businesses", link

  18. randommagic

    I think Eadon has failed to consider how much profit Dell makes in a year. Paying that loan off will be relatively simple for a company that is spending billions buying up companies every year.

    He has stood up to the investors and decided to go his own way with the company I doubt he will suddenly bow down to Microsoft. That would be just silly and a waste of his time changing one devil for another. It looks like he wants to move the company without having to answer to anyone and that can only be a good thing. I fully expect him to keep going with the move into solutions provider as there is a lot more profit involved and the market is massive and worth hundreds of billions to any company who can carve themselves a slice of the pie.

    As an FYI Michael Dell wants to sell more systems with Linux not less.

    1. TheVogon

      I doubt he wants to sell more systems with Linux at the expense of Windows systems. They make more money on Windows per server shifted.

  19. Anonymous Coward
    Anonymous Coward

    Dell, a one-trick pony?

    It's curious as to why Dell haven't previously branched out into other devices years ago, such as the Blackberrys, iPods and games consoles ...

  20. Anonymous Coward
    Anonymous Coward

    The first thing Mr Dell needs to do is get back to their original core values. Thats direct selling only and a focus on quality.. The quality has certainly gone out the window just like HP even if it has improved again a small amount in the last few years its still not anywhere near what it used to be (I am looking at you Optiplex and Vostro series SFF desktops!).

    Thing is I can't see them ever focusing on hardware again noww they have made such a push into the services and software areas.

  21. Fihart

    This could break Michael Dell.

    According to BBC, this deal is about Michael Dell maintaining control in face of opposition from shareholders who don't like the way he is running the company.

    If the banks who are backing him now aren't happy with future results (and Dell is in the wrong place in the business right now) they might eventually pull the plug and sell the assets, leaving Dell as a creditor (to the tune of the fortune he has spent in this manoeuvre).

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