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Why Dell's private future will mirror its public present

Brad Chacos | Feb. 6, 2013
It's official: Dell (the man) is taking Dell (the company) private once again, with the help of a significant investment by the Silver Lake investment group and a $2 billion--with a "B"--loan from Microsoft. Aside from bankers, though, who cares about the financial details? Titanic events aren't titanic because of the nuts and bolts. It's their impact that's earth-shaking.

What about the Surface line-up?

Ah, here's where things have gotten muddled. Ever since rumors of Microsoft's involvement in Dell's privatization where first whispered in the back alleys of the Internet, those whispers have postulated that Microsoft might use its newfound leverage to further its Surface hardware initiative in some way. Some rumors speculated that Microsoft might fob off Surface production on Dell entirely! Hogwash, the analysts say.

"No," Baker says flatly. "I don't think there's any chance of Microsoft turning Surface or anything about the Surface over to Dell. In the end, this is something Microsoft feels it needs to do under its own brand. Surface isn't just a device, it's also an understanding of consumer preferences, and how end users want their hardware to interact with their software.

"For Microsoft, having a direct play on that is much more important than the volume sales or how much money Surface makes. I really can't see them handing this to Dell."

The other analysts feel that in the short-term, Microsoft may use Dell's deep supplier connections to streamline production of the Surface line. In the long term, a stronger Dell could lead to the end of the Surface brand entirely, Moorhead says.

"If Microsoft believes that some of the best upcoming Windows tablets and notebooks are based from Dell, then there's no reason for Microsoft to be in that market," he says.

The bottom line

If that Surface-ditching scenario ever happens, it would likely be years down the line--matching the timeline of the other goals in Dell's ongoing remake.That focus on long-term strategy over short-term gains is exactly why the company has decided to go private.

All-in-all, the company's newly private status likely won't change much for everyday users in the short term. Dell will continue making computers and restructuring the company to focus more heavily on the enterprise market, just as it has been doing for the past several years. That reality may not be "sexy," but it is a huge deal for Dell and the Windows ecosystem alike--and the substantial investments of Silver Lake, Microsoft, and Michael Dell himself guarantee that future will occur, Wall Street whims be damned.


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