Dell Goes Private – Second Act Success or More of the Same?

By Jon Winsett

CEO, NPI

October 30, 2013

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Yesterday, after eight months of contentious battle with players like Blackstone Group and Carl Icahn, CEO Michael Dell and investment partner Silver Lake inked a deal to take Dell private. Forbes has called it the “nastiest tech buyout ever.” Any doubters only need to reference Mr. Icahn’s now infamous tweet: “All would be swell at Dell if Michael and the board bid farewell.”

Dell proved itself tenacious yesterday, if not victorious. Only time will tell if a privately-held Dell can reinvent itself. But, by all accounts, it marks the beginning of a new direction in leadership for the company. Agam Shah of IDG News Service discussed the implications in a recent article:

"Michael Dell believed that taking the company private could remove the pressure of answering to shareholders and give leaders more flexibility in decision making. The company has committed to retaining its product lines, including PCs and enterprise products…

The company is also expanding the reach of its commercial products worldwide, Dangerfield said. Dell is opening two more centers next year in Sao Paolo and Dubai where customers will be able to test software, servers and other Dell products before deployment. The company already has 14 such centers worldwide."

The buyout comes at a critical juncture in Dell’s evolution. It’s no secret that Dell has struggled to stay ahead of the innovation curve in recent years. This change presents a tremendous opportunity for the vendor to get back in the game – especially for its enterprise solutions.

What if Mr. Dell and his investment partners at Silver Lake could change the game altogether? As I’ve pointed out many times on this blog, enterprises are demanding more than innovation from their IT vendors. The question isn’t just “can you provide a solution to my problem?” It’s also “can you provide a solution in a way that makes it easier to manage IT cost and complexity?”

In the last decade, Dell has seen the underbelly of IT disruption. Armed with this insight, will they focus solely on “catching up” or will they approach the enterprise market differently altogether? The latter is certainly worth a shot.

Out from under the pressures of its former shareholders, Dell has a rare opportunity to chart a different course for how it conducts business with mid-market and enterprise customers. The leadership team at Dell should extend their focus beyond R&D innovation and into the areas of vendor transparency – especially when it comes to licensing, pricing, discounts, usage rights, terms and conditions.