Computerworld - There are still many unknowns about how going private will affect Dell and its customers, but company executives insist that the computer vendor will continue to pursue its latest enterprise strategy no matter what.
Earlier this month, Dell founder Michael Dell teamed up with investment firm Silver Lake on a plan to buy the world's third-largest PC maker from shareholders for about $24.4 billion. With some shareholders voicing opposition to the offer, the terms of the leveraged buyout could change but analysts nonetheless expect the deal to close.
In recent years, Dell has been trying to transform itself from a low-margin PC vendor to an enterprise IT systems provider offering servers, storage, networking, software and services. Since 2007, Dell has acquired 25 companies to beef up its enterprise product portfolio, but it has so far had trouble bundling its new assets into a cohesive product strategy.
The company's enterprise strategy will not change, said Dell spokesman Jess Blackburn. "By becoming a private company, we can more effectively proceed executing that strategy," he said.
Some analysts say that once the deal is approved, Dell could move to hasten the downsizing or elimination of its consumer business.
As a privately held company, Dell could make such changes without facing the wrath and impatience of shareholders each quarter.
Hewlett-Packard indirectly validated Dell's enterprise plan by calling attention to it after the deal was announced. In a statement, HP warned Dell users that "leveraged buyouts tend to leave existing customers and innovation at the curb."
One Dell user who won't be waiting at the curb for HP is Tom Glaser, vice president of IT at Howard Community College in Columbia, Md.
The college, with some 13,000 students, has a major investment in Dell products, which have "proven to provide quality and reliability," Glaser said. He expects Dell to provide the same strong customer service levels after the buyout.
"Good business and customer partnerships are earned over time, so their competitors would need to do more than just pick us up at the curb," Glaser said.
Dell has been working to win enterprise customers like Glaser in recent years. Two years ago, it held its first of several large user conferences to provide forums for Michael Dell to show how the company is integrating its hardware with new services and software.
So far, Dell's strategy appears to be succeeding. The enterprise services and software business now generates more than one-third of Dell's revenue and more than 50% of its gross margin, David Mehok, executive director of investor relations, said last month.
Dell's strategy is also apparent in its recent acquisitions.
It bought thin client maker Wyse last year and is now set to launch a flash-drive-like computing device with multiple uses. It also bought Clerity Solutions, a provider of products and services for mainframe migrations, and security tools vendor SonicWall, among other companies.
The new ownership structure may leave some people uncertain about the company's direction, but Dell customer Clemson University has grown accustomed to Dell being in transition, said CIO James Bottum.
"Dell is in transition, and the transition has been going on for some time," he said. "We like Dell. We feel we got a good partnership and feel they are very adaptable -- I'm not afraid to bet on them."
Gregg Keizer and IDG News Service reporters Agam Shah and Marc Ferranti contributed to this story.
This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.
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