New Dell won't abandon the PC

Post buyout, the company can push into the high-margin products and services business without Wall Street meddling, Michael Dell says.
By Chris Kanaracus and Agam Shah

Computerworld - Dell will continue making acquisitions and will remain committed to its struggling PC business once its $24.9 billion deal to go private is complete, according to company officials.

The long, twice-delayed purchase of Dell by CEO Michael Dell and investment firm Silver Lake Partners was finally approved by shareholders earlier this month. Once the deal closes, likely by Nov. 1, Michael Dell will hold a 75% stake in the company he founded in 1984.

As a private company, Dell will be able to recapture the "entrepreneurial spirit" of its early days and more effectively execute a strategy of moving heavily into the high-margin products and services business without pressure from Wall Street, Michael Dell said.

Dell's post-buyout plan emulates the strategies of publicly held companies like IBM, Hewlett-Packard and Oracle, which package software, hardware and services into integrated offerings.

The new owners also plan to invest heavily in research and development, expand the sales staff, broaden the scope of partner programs and expand the company's presence in emerging markets, according to Michael Dell.

But company officials also vow that the personal computer will remain a core part of the business, dismissing reports in recent years that Dell was planning to exit the market where it got its start.

"We will continue to make large investments in R&D in enterprise solutions and services," said Chief Financial Officer Brian Gladden, but then quickly added, "By no means is that a statement of our lack of commitment to the PC business."
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