Dell reboots as a private company
A year ago, tech CEO Michael Dell paid almost $25 billion for a computer maker … called Dell. He bought enough shares to take the company he founded private, meaning no quarterly earnings reports. At the Dell World conference in Austin, he’ll show off a reboot-in-progress.
One area where Dell wants to grow is data services: Helping corporate clients manage “the cloud.”
There are pitfalls to a cloud strategy, says James Kelleher, an analyst with Argus Research. “Number one, it’s not enough to announce that you’re a cloud company,” he says.
Simply providing software tools isn’t enough either, he says. As companies like IBM have learned, “you need to actually provide the cloud facility.” Competitors like Amazon have had early success with that strategy.
Meanwhile, Dell can finance its transition by selling more computers. Tablets have eaten into traditional PC sales, but for now, Dell’s are strong.
“That’s really the million-dollar question here, for every technology company,” says Matt Eastwood, an analyst with the tech consultancy IDC. “How quickly will that traditional profit pool begin to dry up, and how quickly will those new profit pools develop and emerge?”
As a private company, Dell won’t have to worry about the stock market freaking out if it doesn’t show results every quarter.
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