I had a fascinating and wide-ranging discussion with Michael Dell in advance of last week's Dell World. (We even chatted about his new Tesla S. He's a big fan of that car.)
But what's of greater interest is how becoming private will change Dell. Since the company's no longer beholden to shareholders and quarterly earnings, Dell now seems prime to innovate and to renew its commitment to both customers and partners. In the long run, this should make Michael Dell a better CEO and Dell a better company.
Robots and Watson and Scanners, Oh My
I shared with Dell my belief that robots, 3-D scanners, intelligent systems such as IBM Watson and superconductors are all fighting to be the next big thing. Google is working furiously on robots, HP on 3-D printers and scanners and IBM on intelligent systems. I asked about Dell's plans to create the next wave.
While he neither confirmed nor denied he was working on any of these things, he did point out that, by going private, Dell will have more than $1 billion in extra cash every year. This cash will be spent on buying down debt and making big bets on the future consistent with, but not limited to, the technologies mentioned above. Since Dell sets the benchmark on how to buy companies right, acquiring a firm that already has an advanced position is clearly on the table as well.
Dell has been freed up to create a new wave - and Michael Dell seems excited about being freed up to anticipate a market instead of chasing it.
Keeping Customers Happy Is Easy Without Shareholders
Most people don't realize that a public CEO really has to balance a company's interests among a number of key customers. This includes the customers for their stock, which just wants stock prices and dividends to go up; they don't really care about customer satisfaction, employees or the sustainability of the company. That's how Mark Hurd could get such high marks as HP's CEO even though he crippled the company. Plus, since CEO compensation is often tied tightly to stock performance, this can make CEOs do stupid things to keep their companies running.
By going private, Michael Dell now only has to worry about users and IT buyers. Yes, there is tension between these two groups, but it's far less than that created by investors. As a result, the complaints I get about Dell have fallen off a cliff; Dell customers, collectively, seem much happier.
Granted, some of this is likely due to how upset they are at Oracle at the moment, making all other companies look better by comparison, but Dell's renewed focus on customers' needs hasn't gone unnoticed - and this is happening in advance of the major changes that going private will drive.
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