Sources say that Dell, the almost thirty-year-old tech company, is close to striking a deal — the biggest since the beginning of the financial crisis — that would take the company private. Founder and CEO Michael Dell is in talks with Microsoft and tech investment company Silver Lake Partners for a possible $23 billion deal that would remove the company from the demands of Wall Street.
Dell once had a market capitalization of over $100 billion making it the largest PC maker, but has now fallen to number three behind HP and Lenovo.
This is a slap in the face to Dell, who started this company in his dorm in 1984 at the University of Texas. In 2007 he promised to position the company for the new age, but it looks like he has fallen short on his promise. According to The Wall Street Journal employees speak of a less enthusiastic company leader, far from the eager CEO they remember from before the downturn.
By going private Dell will have more control over its performance and product offerings since it will no longer have to answer to stock holders or the SEC. Microsoft stands to gain a closer relationship with Dell products allowing another outlet for Windows software.
A Dell laptop was the first computer my mom bought me in preparation for college. Then when I went away to grad school six years later my boyfriend bought me a sleeker Dell laptop that was lighter and customized with cosmetic flare to fit my personality. Once I graduated, I wanted to help my mom transition into the 21st century, so I bought her a Dell desktop. For my family Dell has made having a personal computer affordable. Also, in both undergraduate and graduate school I studied Dell as a positive example of supply chain management and leadership at perfecting the “Just in Time” inventory system.
However, in today’s world we’ve gotten a lot more mobile. So much so, that not even a laptop is compatible with our way of life. We now work and play on our mobile phones and tablets which are much lighter and have growing capabilities that infringe upon the need for a laptop or desktop computer. Beyond business purposes, many people are shying away from the personal computer space and leaders in the industry are starting are starting to feel the pain.
Moreover, as the The New York Times’ Dealbook blog points out, the price point for laptop computers has been brought low by competition from companies like Lenovo and Samsung.
This deal has not been finalized yet, but could be announced today, according to Times’. I’m sure Mr. Dell will hold out for as long as he has to, in the hopes of getting the best deal for his baby.