Nuts to Wall Street

Dell free to go back to startup roots

Lucy Carey
dell2

Michael Dell has won the right to buy back his company, giving the struggling firm the freedom to go back to its entrepreneurial roots.

Dell company officials were celebrating this week after getting
the nod  on to take the business he started in his college
dorm room private again in a $24.9 billion deal, expected to shift
software to the centre of the firm’s strategy.

Thanks to the rise of Chinese competitors and
the unstoppable rise of tablet and smartphone, Dell has struggled
to retain a grip on the market in recent year. Founder and CEO
Michael Dell, who gave his name to the business,
said
in an open letter
that he hopes that the move,
made possible with a little fiscal help from Silver Lake Partners,
Microsoft, and a few financial institutions, will allow the firm to
recapture the “entrepreneurial spirit” of its early
years.

Outlining his vision for the future, Michael
made comparisons to how the innovations of cloud, big data, mobile
and security are, “changing people’s relationship with technology,
just as the PC did almost 30 years ago.” He wrote,“it’s time to do
what Dell does best make these innovations simpler, more affordable
and more accessible, putting more power into the hands of more
people than ever before.”

In the new deal, approved by shareholders on
Thursday September 12, Michael will hold a 75 percent stake in the
private company. Following the announcement, in a conference call,
he commented that by going private, he believes the company can be
more effective in pushing high-margin products and services without
Wall Street breathing down its neck. Ultimately, if Dell is to have
a hope of regaining its former glory, a massive realignment to
become a more full-featured, enterprise oriented company is vital –
 and that’s something that would have been impossible with
public stockholders clamouring for bigger profits all the time.
 

Developers will benefit from increased
development, as will Dell’s R&D and acquisitions departments.
Michael also said that the company will expand its sales force,
staff and partner programs, as well as grow its presence in
emerging markets.

Chief Financial Officer Brian Gladden reiterated
the need to concentrate on new growing sectors, but noted that the
firm won’t be disregarding their PC roots, saying, “What we’ve seen
is that part of the market is growing faster. By no means is that a
statement of our lack of commitment to the PC business.”

 

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