Microsoft Possible Dell Buyout

Nightglow · 23 Jan 2013 at 09:44

Intresting rumour going around that Microsoft to invest billions into Dell buyout.

http://www.tweaktown.com/news/28045/rumortt-microsoft-to-invest-billions-into-dell-buyout/index.html

Theophany · 23 Jan 2013 at 09:53

Not sure I see this happening, even if it does make sense for Microsoft in some ways. The antitrust lobby will have something to say about it all, I'm sure!

panyan · 23 Jan 2013 at 09:56

I think Microsoft getting into the hardware business is a huge mistake.

Its software complements all the major PC OEM's, but now it is going from a complementor to a competitor which i think will damage their business.

Nightglow · 23 Jan 2013 at 09:56

Theophany said:
Not sure I see this happening, even if it does make sense for Microsoft in some ways. The antitrust lobby will have something to say about it all, I'm sure!

I thought the same, but Microsoft will probably find some way around any stumbling blocks, but it could be a big mistake buying Dell.

Tazzfalcon · 23 Jan 2013 at 10:19

Dell doesn't seem like the type of OEM that Mircosoft should waste money on either. One of the dynamic eastern OEM's would make more sense but I pretty much agree that investing in any OEM has more pitfalls than obvious benefits for their core business.

POB · 23 Jan 2013 at 10:22

Tazzfalcon said:
Dell doesn't seem like the type of OEM that Mircosoft should waste money on either.

Wrong, Dell's Enterprise stuff is good, and MS make most of their money from business customers.

This is where Apple fails in not offering the solutions to support their client computers.

daz · 23 Jan 2013 at 10:22

panyan said:
I think Microsoft getting into the hardware business is a huge mistake.

Its software complements all the major PC OEM's, but now it is going from a complementor to a competitor which i think will damage their business.

Everyone's going vertical these days, it makes a lot of sense in many ways.

Theophany · 23 Jan 2013 at 10:24

Nightglow said:
I thought the same, but Microsoft will probably find some way around any stumbling blocks, but it could be a big mistake buying Dell.

Totally depends on what markets they've got in mind for Dell though. They still look after a large amount of service contracts for institutions and I'd wager that's where they make their money. Large multinationals that aren't going to switch from their MS Server 2kX setups.

I've no idea how Dell are doing in the retail space these days - iirc they were the largest manufacturer for individuals? Either way, with their monopoly on operating systems it's hard to see OEMs moving away from shifting Windows on each new machine even if MS do move into a competitive space.

bitslice · 23 Jan 2013 at 10:26

I don't predict a sudden rush for people to buy more hardware, so I don't follow what Microsoft would get from such a deal.

Windows 8 isn't setting any records, but 'buy this software - get a free PC' isn't profitable either.
They should stick to their core business and maybe stop releasing such a bloated buggy mess every two years.

Oddly intel bought into an AV company a while back, not sure what the outcome was though.

Leprechaun312 · 23 Jan 2013 at 10:28

Could be interesting but will that make any of us buy dells over building our own pcs from overclockers?

Theophany · 23 Jan 2013 at 10:29

bitslice said:
I don't predict a sudden rush for people to buy more hardware, so I don't follow what Microsoft would get from such a deal.

Windows 8 isn't setting any records, but 'buy this software - get a free PC' isn't profitable either.
They should stick to their core business and maybe stop releasing such a bloated buggy mess every two years.

Oddly intel bought into an AV company a while back, not sure what the outcome was though.

McAfee I think? At the time there was speculation of embedding AV capabilities at the silicon level, I don't think anything has ever come of it though.

Redgie · 23 Jan 2013 at 10:30

Surely Microsoft could buy any large scale hardware manufacturer for this purpose, why pick one as high profile and expensive as Dell?

~Dockie · 23 Jan 2013 at 10:33

panyan said:
I think Microsoft getting into the hardware business is a huge mistake.

360 springs immediately to mind.

Don't forget Dell own Alienware too, and they are pretty much 'A Gamers Mac'. It might not be a bad investment for them, providing they leave Dell to the hardware, and they keep to the software.

Basher · 23 Jan 2013 at 10:33

Redgie said:
Surely Microsoft could buy any large scale hardware manufacturer for this purpose, why pick one as high profile and expensive as Dell?

Quite. Dell has lots of bits that MS just wouldn't want.

If they seriously want to get into hardware, why wouldn't they just buy one of the far eastern manufacturers? And why not buy one that also makes mobiles?

Such a move would be a pretty bold statement in terms of their GTM.

StriderX · 23 Jan 2013 at 10:35

Redgie said:
Surely Microsoft could buy any large scale hardware manufacturer for this purpose, why pick one as high profile and expensive as Dell?

It has a massive amount of things already built up, Microsoft wont have to do much rearranging I imagine.

Macro · 23 Jan 2013 at 10:39

Misleading title is misleading...

Dell are talking about taking the company back to private again so it can concentrate on new innovative designs and products (Alienware?

) without having to worry about squeezing every last dollar out of the business to give to public stockholders. As it stands this isn't MS "buying" Dell in the same way they bought Skype for example.

The buy back is being lead by a private equity firm, Microsoft is just one of the potential investors. Fundamentally it's in MS interest to keep key partners in business and arguably they will stand to get a better return on the investment than by leaving money in the bank.

MS did a similar investment into Apple in the 90s to help keep them afloat.

Basher · 23 Jan 2013 at 10:39

StriderX said:
It has a massive amount of things already built up, Microsoft wont have to do much rearranging I imagine.

Seriously? How much of Dell is currently successful? How easy would any of it be to integrate into the MS business model? Software companies buying hardware companies is hugely challenging. The metrics are completely different from a management perspective.

ubersonic · 23 Jan 2013 at 11:41

Basher said:
If they seriously want to get into hardware, why wouldn't they just buy one of the far eastern manufacturers? And why not buy one that also makes mobiles?

Im sure the US monopolys commission would have no issue with them buying a Asian manufacturer to try and take over the US market...

And they already have mobiles locked up via Nokia.

Burnsy2023 · 23 Jan 2013 at 12:01

Redgie said:
Surely Microsoft could buy any large scale hardware manufacturer for this purpose, why pick one as high profile and expensive as Dell?

Because Dell are a key MS partner. There is so much cooperation between the two that MS have an interest in making sure Dell see MS' strategic views.

NathanE · 23 Jan 2013 at 12:12

The PC industry is changing. Dell are very vulnerable right now and they are expecting bad quarters this year. As is Microsoft. The two are considering consolidating so they can focus on a single vision for the post-PC era.

This has everything to do with next-gen hardware and PC form factors (i.e. tablets) than anything else.

I'd not be surprised to hear soon that Intel are getting on this deal too. Since Intel has just posted major profit declines as a result of poor PC shipments worldwide.