Microsoft's loan to Dell certain to trigger more OEM angst, say analysts

$2 billion loan will affect Microsoft's relationships with other partners, but how that will play out is unclear

Microsoft's $2 billion loan to Dell, one of its largest computer-making partners, will have an impact on how other OEMs view their Windows ecosystem collaborator, analysts said today.

The extent of that impact, however, is unclear to the experts, although they are certain it will do something to the relationships Microsoft has with others.

"This has to strengthen the relationship between Microsoft and Dell," said Michael Cherry of Directions on Microsoft. "If you and I were OEMs, we might have thought that we played in a moderately-level playing field. But after Microsoft said, 'Guess what, we're an OEM, too,' it would only be human nature to think that 'There's us and everyone else, and then there's the Surface guys ahead of us.' Now there's Dell in front of us, and in front of them is Surface."

Cherry was referring to Microsoft's surprise announcement last summer that it would take the unprecedented move of becoming an OEM (original equipment manufacturer) to design, build and sell a pair of Surface tablets. The first, the Surface RT, debuted last October; the Intel-powered Surface Pro goes on sale Saturday.

"I feel that any kind of assurance to the contrary, that this has got to weigh in everyone's mind," said Cherry. "It changes things."

Not as much as it would had Microsoft done a different kind of deal with Dell, said other analysts.

"The fact that it's a loan distances Microsoft from Dell a bit, so the OEMs should be better with this than if Microsoft took an equity stake," said Michael Silver of Gartner, in an email.

For its part, Microsoft was closed-mouthed about any details of the deal, acknowledging only that it had provided a $2 billion loan to the group that proposes to take Dell private.

"Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future," the company said in a statement Tuesday. "We're in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform."

Allan Krans, an analyst with Technology Business Associates, agreed with the "constantly evolving" concept.

"The top tier of OEMs is in a period of realignment," said Krans. "They're in flux and need a lot of help. And Microsoft has the deepest pockets of anyone in the ecosystem, and they needed to take more of a leadership role. Someone needed to come in and make sure that there's stability there."

By pitching in on the Dell deal, Microsoft ensured that Dell continued to be a major PC player -- last quarter, it was the world's third-largest personal computer maker, with an estimated 11% share of the market -- and committed to Microsoft's software, said Krans and others.

"It's not necessarily a bad thing [for HP and Lenovo]," said Krans of the loan, referring to last quarter's No. 1 and No. 2 OEMs. "If [Microsoft's loan and Dell's privatization] can be successful, HP and Lenovo benefit indirectly because it makes the overall Windows ecosystem stronger. That's the unifying piece across all this."

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