After the Dell Shareholder Vote: Balancing Debt, Partners and Customers
Dell’s push to go private in a $25 billion buyout is set for a shareholder vote on Sept. 12, despite the protests of Carl Icahn. It looks like Michael Dell and Silver Lake Partners are set to win the shareholder vote. If so, the hardware giant’s stock will shift out of public markets. But will a privately held Dell be able to balance debt, customer and partner service? Hmmm…
Dell Channel Chief Greg Davis has maintained his team’s focus amid the battle to take the company private. Earlier this month Dell launched a complete partner program for its growing software portfolio. And if you look ahead, Davis and the PartnerDirect team will have a key role at Dell World 2013, a major customer and partner conference (Dec. 11-13, Austin, Texas).
Conventional wisdom says Dell, as a privately held company, will be able to focus on long-term strategy, execution and innovation — rather than day-to-day profits and Wall Street earnings expectations. The shift to being private, in theory, means Dell can invest for the long haul without penny pinching to meet earnings forecasts.
Generally speaking, The VAR Guy agrees with that thesis. But some critics wonder: Will Dell be too busy servicing debt to focus on customers, partners and innovation. Back in February 2013 when Dell first announced plans to go private, Standard and Poor’s (S&P) expressed some concerns about the company taking on so much debt.
In the technology market, some pundits are also concerned about Microsoft’s (MSFT) influence at Dell. The software giant is set to loan Dell $2 billion as part of the strategy to go private. That $2 billion loan makes some folks wonder if Dell will give Microsoft Most Favorite Nation status — essentially betting the desktop and mobile strategy on Windows 8 and perhaps scaling back or eliminating projects involving Ubuntu Linux, Google Android and other market options.
What will a privately held Dell really look like? Assuming shareholders approve the proposed company buyout, we could get the answer soon…