There are speculations that Dell is buying back stock and become a private company again. There are also new rumors that Microsoft will be involved in it. According to reports, Microsoft is planning to invest up to $3 billion for a stake in the private Dell.
Michael Dell asserts that Dell is not just a PC company anymore and it has expanded in various areas of technology. But the company is still synonymous with PC and its fortunes have dwindled as the PC industry got anemic sales.
By going private, Dell would be free to do risky things that it couldn’t get away with as a publicly traded company. Shareholders are not willing to do anything too bold or dramatic. Microsoft and Dell will benefit from partnership. Dell needs the extra cash for the buyout and can get strategic advantages with a closer Microsoft partnership.
Analysts believe that an investment an investment in Dell in Microsoft is a good move but it involves some risks. A private Dell is more powerful than a public one and a private Dell partnered with Microsoft would be a more powerful combination than Google and Motorola. The two companies have a close relationship to begin with. The transition for any sort of merger, acquisition or strategic partnership will be smooth.
Microsoft recently ventured into the hardware market with the Surface tablets. With a partnership with Dell, it will enable Microsoft to hand off Surface and leverage the Dell supply chain and brand. But analysts warned that Dell should be firewalled from Microsoft to ensure the company’s relationship with other vendors. A Dell-Microsoft partnership will be more powerful than the two companies’ relationship that exists at present.
There’s no official word yet if a deal is in discussions but it would be interesting to see if any of the Dell rumors would turn out to be true.