After much rumors about the Dell Inc. buyout, the company made it official. Michael Dell, Dell’s Founder, Chairman and Chief Executive Officer, in partnership with a technology investment firm Silver Lake, will acquire Dell. According to the deal, all shareholders will receive cash, at $13.65 per share, which is a 25 percent premium over its closing price. The transaction is valued at approximately $24.4 billion — one of the biggest. But the bigger question is, how this impacts the PC market?

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The deal is not coming overnight, it has been in works since August 2012, when a special committee was formed to take Dell private. One of the reasons to this is attributed to Dell’s falling PC market share. From being the number one, it had fallen to number three last year, behind HP and Lenovo. This was followed by huge drops in profit for the company. So, does it get worse from here, or is this a fresh start?

Here’s what Michael Dell, Chairman and Chief Executive Officer, had to say —

I believe this transaction will open an exciting new chapter for Dell, our customers and team members. We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise. … We are committed to delivering an unmatched customer experience and excited to pursue the path ahead.”

Dell’s words on the deal signals a new chapter in Dell, but can it revive it’s PC business, and move inline with the mobile devices trend? Dell had tried to enter the mobile device market with a few mobile devices, but it failed miserably, and made no impact. Their products lacked innovation, and that has been the company’s weal point. Even in the PC business, it is considered as an assembler of PCs for consumers and businesses. To be able to survive the consumers’ confidence, would be to develop innovative products.

With companies like HP, Lenovo, Acer, Asus, Toshiba, and others, doing a great job, Dell’s exit won’t certainly impact the consumer PC market.

But, if analysts are to be believed, Dell may exit the low margin consumer PC business, and focus on enterprise PCs and IT Services. IBM, Hewlett-Packard and Oracle also offer IT services, but to high-end customers. Dell could offer the same services to the middle markets, and some analysts think, that is one place where Dell will excel.

By taking his company private, Michael Dell, has taken up a huge risk. There is definitely lot of uncertainty when a company goes through this phase, but we can only wait to see what Dell has in place for future. One thing is for sure, Michael Dell does what he preaches. In 2007, when Apple was going through the same lows, Dell said —

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

Well, Steve Jobs and Apple went the other way, and now we all know what Apple means to the technology industry.

 

Via: TechnoBuffalo

Source: Business Wire, Dell

I am a tech-enthusiast and a web developer-n-designer. I follow technology and the web world closely, and I have a passion for writing about and reviewing the latest and greatest from the world of tech. I started innowrx! in an endeavor to keep you updated with news and information that you can use. I am also an avid web developer and designer who loves to create awesome web and apps. I love food, music, travelling and exploring new places.

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