Dell’s Future: 3 Wild Cards CIOs Should Understand

Partner David Rutchik discusses the impacts of Dell’s privatization announcement in this contributed article, exploring the impacts on customers and the marketplace. Sample excerpt: “When Dell's board of directors recently approved a $24 billion bid led by CEO and founder Michael Dell and private equity firm Silver Lake Partners to take the company private, it marked the largest leveraged buyout since the financial crisis. Another twist to the deal is Microsoft, which will provide $2 billion to support the ‘long-term success of the PC ecosystem.’…For CIOs considering buying in to Dell's ITO vision, the transaction (assuming it's approved by shareholders) will have ramifications in three main areas: The benefits and risks of going private. On the positive side, now that every dollar invested doesn't need to move the near-term earnings needle, Dell will be able to make longer-term investments to grow and enhance its services business without sweating market scrutiny and quarterly earnings pressures. The company can also focus management attention and resources on unifying its string of acquisitions into an integrated software, hardware, and services platform. As Dell's CFO Brian Gladden recently commented, 'Without having the scrutiny that is associated with a publicly traded stock, we can make the necessary investment and stick to plan, [and] in some cases be more aggressive than we can today…'”