Dell buyout is about the enterprise, not the PC

Dell buyout is about the enterprise, not the PC

Summary: If the Microsoft investment is a driver, then it's Dell/Azure for the win.

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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.

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Topics: Dell, Cloud, Data Centers, Microsoft

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8 comments
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  • thank you for this post David

    Now apple paid shills and some open source nuts will try their best picking it appart. This post is a light in the darkness of paid zdnet fanbois
    Master Wayne
  • dell will go down with M$

    M$ cash will only poison more the dying company.
    LlNUX Geek
  • Dell, for all intents and purposes, will be like one of MS's divisions,

    and the retention of the Dell name is just for the perception of independence.

    In essence, Dell will be delivering servers with Microsoft technology, and PCs with MS technology, and tablets with MS technology, and perhaps even smartphones with MS technology.

    MS could have outright purchased Dell, but, MS still has partners in the industry which depend upon MS OSes and software and support. Swallowing up Dell would have created a tsunami and chaos in the industry, where far too many companies would have had to re-purpose/redefine their missions and products.

    IN essence, the merger of Dell with MS wasn't appropriate at the moment, and it can still happen. It's just a matter of how the rest of the MS partners perform going forward with Windows 8 and RT for tablets and WP8 for smartphones. Microsoft took a first step towards becoming a provider of the entire ecosystem of computing. Making it official right now, would have been too much of an upheaval. Dell was the company which MS targeted, but simply because it was performing below expectations and was looking for help; but, if HP had been in the market for acquisition, then it would have been MS/HP instead of MS/Dell.
    adornoe
    • With a stupid analysis like that

      You shouldn't have any problem with your next EPIC FAIL.
      CaviarGreen
      • Why don't you crawl back into that craphole you came out of, and leave the

        grown-ups alone.

        You have nothing to contribute, and never have, and never will. So, go away and crawl into your sewer. This site will automatically improve by getting rid of you. BTW, why do you keep changing IDs. YOur crap is easily detectable no matter how many IDs or disguises you use.
        adornoe
        • I would love that

          While i more or less agree on alot of points... It was never going to be dell. As you say it would cause chaos... Dell is to big a player for Microsoft to buy. And i dont mean they can't afford it, they could buy Nokia, Dell, HTC and a few others all tomorrow... If Microsoft were to buy a Pc manufacturer it would be someone like Gateway, small, out of the lime light and a perfect buy if microsoft were in the market for a manufacturing plant... HP is to big to... Because there are so many OEMs, buying a big one, you risk scaring off the likes of Acer, Gateway, Asus, Toshiba and all the smaller OEMs... Buying a smaller one would be dodgy but could force the big OEMs to innovate on a grand scale...
          Personally I think the best buy for Microsoft possible today... is Asus... They make EVERYTHING except CPU and GPU and most of the time the best stuff... Mother boards are beast... GFX cards are beast, Sound cards are beast, monitors are beast... but that would cause absolute madness..... you would have every Motherboard OEM GFX card OEM and so on callin foul not to mention all the PC OEMs that use Asus innerds....

          But thats crazy talk... Microsoft do this all the time... Sure they gave apple 150 mill (might be off but couldn't be arsed lookin it up) with spooky timing as jobs came back 3 months previous and anounced Office and loads of other MS software for Mac... Nokia is a great one... thought its obvias what microsoft got out of that... but yea
          Skunkwurx
        • adonoe you are truly a dumb ass

          You should thank me for pointing out that 3rd grade 'analysis' you attempted to make. Stupid was is stupid is. That's you.
          CaviarGreen
    • For all intents and purposes...

      In reference to your first paragraph about delivery, isn't every device manufacturer wanting to deliver the same thing?
      chopspin.com