What you are saying makes sense and matches up with what is happening. However, I still find it hard to believe that Dell is basically throwing in the towel.

When Dell’s M&A chief left I was very surprised because Michael Dell has been saying for years that Dell’s strategy is the IBM strategy. That they will become a services, software, and hardware conglomerate. When their head of M&A left I was like, “hold on a second, he isn’t finished yet, not by a long shot.”

Dell still has a very long way to go if they want to be like IBM. Looking at Dell’s portfolio they have competitive server offerings (but this business is being commoditized slowly like PCs have). They also have storage and networking products, but they are not competitive enough. Storage has been losing revenue and market share each quarter and for networking all they have is a switch. Looking at services they are competitive there, but only on the small/medium side. Their services division is not large enough for the big deals. Lastly, in terms of software they have some good products, like Quest, but that is not nearly enough to move the needle.

Dell is still primarily a PC company as much as they may not like it, that is where they are at right now. If Dell gives up on the IBM strategy, I don’t see them finding it any easier sticking with PCs. That business has not had good margins for a long time, and now with Lenovo it is just going to be even harder. Lenovo doesn’t seem to care if they have margins of only 1%. I think it is more a matter of national pride for them (China) that they own the market. I have read that Lenovo is one-third owned by the Chinese government.

Is Dell really going to throw in the towel on the IBM strategy??? Maybe they are.

@jhesr Buyouts make sense when you are trying to be the first to the top of the mountain. But when your business is imploding, sometimes the best thing to do is to pare back and focus on what you can do well and profitably. Dell going private is going to mean spinouts, not acquisitions, and that makes a lot of sense given the limited growth prospects in their current business. Yes, they will have less market share, but if they do it right they will still have a business, at least — and that means a chance to hang on to ride the next wave. Maybe the second coming of Michael Dell will bring to that company something like what the second coming of Steve Jobs brought to Apple.

With this new going private strategy and the recent exit of Dell’s head of M&A, I wonder if Dell is giving up on the acquisition strategy. If that is the case then I don’t understand how they plan on turning things around.

Dell has steadily been losing PC market share to HP and Lenovo. From what I have read PC’s still make up 70% of Dell’s revenue in one form or another. So, exactly what is Dell’s plan? Are they going to now become more aggressive in PCs after allowing themselves to lose market share for the last two years or so?

If they aren’t going to make more acquisitions then do they think that they are going to be able to make the transition through organic R&D? Dell has never been known as an R&D company. So that would be a big shift.

Dell doesn’t make sense to me anymore. Maybe their game plan is to encourage Microsoft to buy them out.