Microsoft & Dell?
Microsoft buying a chunk of Dell would be smart (for Microsoft)
Excerpt:
The move would make strategic sense for Microsoft. The software giant invested heavily in Windows 8, but PC and tablet sales are lackluster so far -- particularly in the low end of the laptop market, which goes head-to-head with the blockbuster iPad.
With Dell directly under its influence, Microsoft could pressure the PC maker to produce Windows 8 devices that more closely align with its vision.
"I think Microsoft has identified this is an issue and is trying to have more say in its destiny," said Al Hilwa, an analyst at IDC. "It's clear that Microsoft wants to be more aggressive in controlling and directing the hardware ecosystem for PCs."
Microsoft's strategy is evident in the Surface, the first PC of its own design. But having a say in Dell's affairs could also give Microsoft the ability to head off its rivals.Microsoft May Back Dell Buyout
The effort to take Dell private has gained a prominent, if unusual, backer: Microsoft. The software giant is in talks to help finance a takeover bid for Dell that would exceed $20 billion, a person briefed on the matter said on Tuesday.
Microsoft is expected to contribute up to several billion dollars. An investment by Microsoft — if it comes to pass — could be enough to push a leveraged buyout of the struggling computer maker over the goal line. Silver Lake, the private equity firm spearheading the takeover talks, has been seeking a deep-pocketed investor to join the effort. And Microsoft, which has not yet made a commitment, has more than $66 billion in cash on hand.
... So why not just buy all of Dell, as Google did with Motorola? That's too big a risk, analysts say. "Microsoft shouldn't be perceived as favoring one hardware maker over another," said Ronald Gruia, principal consultant at Frost & Sullivan. "That's the last thing Microsoft needs." Taking a stake could be enough to help mold Microsoft's vision for Windows. For Dell, though, having to serve Microsoft as its overlord might not play out so well.
Comment: Not convinced this is a good move for Microsoft
1/29: Microsoft's Role a Sticking Point in Dell Buyout Talks:
ReplyDeleteMicrosoft's role in the new company is proving a sticking point, the people familiar with the matter said. Microsoft is expected to have a say in Dell's operations rather than being just a source of funding for the Dell buyout, they said. Representatives from both companies are busy hashing out the ways Microsoft would and would not be involved in the running of Dell after a deal closes, some of the people familiar said.
Partly at issue is their commercial relationship. Dell, the world's third-largest maker of personal computers, is one of the biggest channels for Microsoft's Windows operating software. The sides are discussing how Microsoft's investment in Dell would alter that commercial arrangement. Under one scenario being discussed, Dell would agree to use Microsoft's Windows software to power the vast majority of its devices, one of the people has said.