Michael Dell vs. Carl Icahn: Whom Can Partners Trust?
Who should own Dell (NASDAQ:DELL)? The leading options include Michael Dell and Silver Lake Partners or Carl Icahn and Southeastern Asset Management. Hmmm… Before we get into the dollars and cents discussion, here's the most pressing question of all for channel partners: Which set of owners offers VARs the clearest path forward? Right now the answer is a simple one.
It's Michael Dell and Silver Lake. Over and over again, Dell and his lieutenants — including Channel Chief Greg Davis — have assured VARs that the PartnerDirect channel program will remain a prime commitment once Dell and Silver Lake Partners complete a proposed private equity buyout of the company. That proposed buyout, by the way, includes a $2 billion loan from Microsoft (MSFT).
The VAR Guy is not suggesting that Michael Dell's plan is fool-proof. Under Michael Dell's management, the company lost its lead in global supply chain management and remained far too dependent on PC sales. A move into enterprise IT services and solutions — including networking, IT management software and storage — appears promising. But at $1.5 billion, Dell's software revenues remain tiny compared to overall revenues.
Still, Michael Dell has offered a consistent message to the channel for nearly a decade now. Over and over again, Dell's PartnerDirect program has transformed skeptical VARs into profitable partners.
Michael Dell wants to continue that strategy even as he attempts to take the company private. But investor activist Carl Icahn — aligned with Southeastern Asset Management — stand in Michael Dell's way.
Takeover Battle
Last week, notes Reuters, Icahn and Southeastern Asset Management Inc. offered $12 in cash per share or additional shares to existing investors as an alternative to Michael Dell's $24.4 billion bid to take the company private. There was also talk about Icahn's investment team ousting Michael Dell from the company as part of the proposed takeover.
Now, Reuters notes, Dell's special board committee has asked Icahn for more details about his plan to buy the computer maker.
Memo to Icahn: Somewhere within your financial plan you better include an open letter to channel partners. Tell those Dell partners how you will value their ongoing commitment. Otherwise, you risk alienating one of Dell's greatest assets — the PartnerDirect channel
Michael Dell has been wise to stay channel friendly. Icahn needs to follow suit.
So you talk how Michael
So you talk how Michael Dell’s plan to protect the channel is a better one . You neglected to go into detail about what causes the huge revenue shift between products and servcies with Dell. Bottom line is that Dell’s inability to create leading consumer based products instead of cheaper copies of consumer products is a real issue. Mix that with their inability to develop a true enterprise strategy that uses products and services together and their overall lack of vision from a management perspective and you have exactly what you have. a rudderless ship plowing through the technology murky waters trying to figure out what it wants to be. that’s a shame since Dell could be so many good things to its employees and partners instead of a collection of disjointed pieces to offer some look of an enterprise organization.
How exactly channel friendly
How exactly channel friendly is Dell? They sell through resellers till they have a ‘directional change’, then sell directly to the reseller’s customers and ignore reseller–this has happened at least twice. Get a quote from Dell, give to customer, customer calls Dell, gets better pricing than reseller. Good thing Dell is channel friendly, I’d hate to think what they’d do if they were unfriendly.