After a few days of analysis, it seems that much of the focus on Dell going private has been on either the $2 billion that Microsoft provided seemingly with an eye to Windows PCs or the need to be able to make major transitions within the company to focus on the lucrative software and services market without the penny-pinching scrutiny of Wall Street.
Frankly, while I’m not a big believer in the “post PC era” mythos, I just can’t picture Microsoft investing in this buyout simply to enable the ongoing focus within Dell in the desktop Windows PC. For all intents and purposes, that market takes care of itself. It just doesn’t matter what the pundits says; until there is a top-to-bottom change in the way knowledge workers utilize computer technology in just about every business, the desktop PC market is safe. It may no longer show explosive growth, but that’s true of almost every mature market.
I admit that I do fall more in the “transitioning to an enterprise services” camp when thinking about the future of Dell, but if I factor in the Microsoft investment I think that it is entirely possible that Dell will take a stand on delivering flagship enterprise services and hardware built on Microsoft Azure. While it’s true that Dell has long been one of the more friendly vendors towards Linux, and Linux is a major aspect of the enterprise and cloud play, it would just make Dell yet another supporter of Linux in the enterprise.
By building a flagship line of enterprise and cloud products and services that utilize Windows Azure (as well as other Microsoft enterprise focused efforts) Dell can more easily differentiate themselves In a very competitive market where the most successful vendors have an identifying strategy where they can hang their hat.
Using Microsoft Azure as the primary hook for enterprise and cloud customers can help make Dell a more significant player in the enterprise market. It doesn’t stop them from also supporting other cloud and enterprise technologies, but it has the potential to make them the highest profile Azure vendor. And they can still support other enterprise technologies, since they already do. But it’s still a better business model to be the number 1 supplier of a major technology, rather than the number 3 or 4 supplier of a variety of technologies with no narrowly targeted plans.