GigaOM » Michael Dell

Dell snaps up Enstratius to build cloud momentum

Barb Darrow — Mon, 06 May 2013 14:52:12 +0000

You have to give Michael Dell credit: his company’s still moving and shaking despite what have to be considerable distractions as he and his private equity pals take the whole shebang private. On Monday morning, Dell said it is buying Enstratius, a startup that provides tools and dashboards to manage hybrid and private clouds.

Terms were not disclosed but here’s how Dell described its new acquisition:

“Enstratius is available as software-as-a-service or as on-premise software that enables full control from within a customer’s data center, or via a hosted service … and complements the capability Dell recently acquired from Gale Technologies, now Active System Manager (ASM), by providing enhanced multi-cloud management and application configuration capabilities and integrates converged offerings with cloud systems management.”

For the past few years, Dell has plotted a tricky course as it tried to morph from a PC and server vendor to a provider of software, cloud and managed services. Toward that end it has bought companies ranging from Wyse and Boomi to bolster its cloud credibility and Quest Software for its data center management and automation tools. Like its rivals in traditional IT — companies including HP and IBM, Dell faces growing competition for enterprise and webscale workloads from Amazon Web Services.

Update: As Dell rolled out its going-private game plan, GigaOM’s Derrick Harris counseled it to get serious about buying up real cloud expertise, which it apparently has.

Here’s how GigaOM described Enstratus (the company added the “i” a few months ago) in reporting the company’s $3.5 million Series A funding in 2011:

“EnStratus is similar to the more widely known RightScale service, although enStratus actually supports more clouds. It currently claims support for Amazon Web Services, AT&T Synaptic Storage, Bluelock, Cloud Central, Cloud.com, CloudSigma, EMC Atmos (e emc), Eucalyptus, Google Storage, GoGrid, Nimbula, OpenStack, Rackspace, Terremark, VMware vSphere, VMware vCloud Express and Windows Azure.”

Not surprisingly, George Reese, CTO of Minneapolis-based Enstratius, said Dell and his company align well. Enstratius runs a tight ship and has managed to stake a claim in enterprise cloud management with “just Series A financing,” Reese said via email.

Reese added that Dell:

“Sees cloud management as a key value point in the cloud computing stack. By acquiring us, they acquire established leadership in cloud management aimed at enterprise needs. Customers don’t want a single solution on a single stack, they want a solution that enables them to interact with many different cloud platforms, public and private. The Enstratius acquisition immediately gives Dell leadership in this area over other large technology vendors.”

Dell ownership gives Enstratius more resources to attack that market faster, he added.

At least one Wall Street analyst agreed (Dell is still trading until its restructuring is complete): Wells Fargo’s Maynard Um characterized the Enstratius buy as a good use of cash. In a research note, Um wrote:

“We believe the acquisition signals 1) management remains focused strategically on transforming the company and 2) from an industry perspective, the importance of being agnostic (though we expect tight integration with Dell’s owned-portfolio).”

This news comes just an hour or so after Quest competitor BMC announced plans to take itself private. Which just goes to show, if you don’t like the current IT landscape now, just wait a minute.

This story was updated at 8:47 a.m. PDT with more context about Dell’s cloud strategy and Wells Fargo comments.

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First Dell, now BMC: Which legacy IT company will go private next?

Barb Darrow — Mon, 06 May 2013 13:51:12 +0000

With BMC being taken private by a pair of private equity firms in a deal worth $6.9 billion or $46.25 per share in cash, one has to wonder what legacy IT vendor will be next to take this route.

Dell blazed the trail in February when it announced plans to take itself off the public market. That move, valued at $24.5 billion, was orchestrated by founder and CEO Michael Dell and Silver Lake Partners. Critics said the price undervalued the company which remains a power in PCs and servers, and is navigating a shift into cloud computing. In the mobile space, Alltel was ahead of the trend, taking itself private in 2007, and was scooped up by Verizon two years later for $5.9 billion.

Citing unnamed sources, Reuters first reported Sunday that a BMC take-out by an investment group comprising Bain Capital and Golden Gate Partners was under discussion. BMC is not a household name for consumers but in business it’s a pretty big deal for enterprise IT and database admins.

BMC brands include Remedy service management software; BladeLogic automated configuration management; and Track-IT help desk and asset management. These are the kinds of non-glam tools that keep a data center running. Dell bought Quest Software, probably BMC’s most direct competitor, in deal that was completed in September 2012.

Who’s next?

Industry watchers said whatever happens with this proposed BMC deal, be prepared for more action. “There’s a seismic shift afoot with enterprise software vendors as they move from traditional pricing and distribution models to OpEx, SaaS and cloud models. This means a financial disruption for many of them, not just BMC Software,” said Dana Gardner, principal analyst with Inter-Arbor Solutions and GigaOM PRO analyst.

To be sure, Dell and BMC are not alone: HP, IBM, Oracle and Microsoft are face withering heat from shareholders who expect the old profitability models to hold up even as the world of computing changes dramatically. As an example, IBM last month stunned the market by missing on profit and revenue expectations for its first quarter. As Forbes reported:

“Revenues from cloud computing and analytics initiative continued to see growth in Q1. However, its core software business had a lackluster performance in the quarter and revenues were $5.6 billion, flat year-over-year (y-o-y) and up 1% in constant currency.”

Cloud upsets the apple cart

Cloud is the disrupting force here. As more companies evaluate the economics of putting workloads on massive webscale infrastructure — outside their walls — they will buy far fewer servers and routers themselves. And as more corporate applications are delivered via software-as-a-service models there are fewer huge upfront software licensing deals. Instead payments are spread out across a year or three. There is also pressure on the massive enterprise service and maintenance fees favored by companies like Oracle.

“There’s a bet to be made,” Gardner said. “Does Wall Street understand such transitions, or does it throw the baby out with the bath water?”

It’s unlikely that giants like Oracle, IBM, Microsoft would go private, but never say never to a flock of smaller companies like BMC that may be sick of dealing with Wall Street pressures. For those smaller enterprise software (and hardware) companies, it may make sense to revert to private control and then re-emerge on the public markets when the coast is clear, or at least less rocky.

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Dell proxy lays out damned-if-we-do, damned-if-we-don’t quandary

Barb Darrow — Mon, 01 Apr 2013 17:11:41 +0000

No wonder Michael Dell (and friends) want to take his company private. According to the company’s proxy, Dell must invest heavily in tablets — where Dell has thus far fallen short — and other areas to get competitive. But investing heavily is just the sort of thing that spooks shareholders of the beleaguered PC-and-server maker. Big time.

In a research note UBS analyst Steven Milunovich wrote:

“Mr. Dell and Silver Lake intend to pursue a more aggressive PC/tablet strategy and invest significantly in the enterprise segment. Consequently, earnings could be weak for two or more years, which would not please the public market.”

The Dell proxy lays out a raft of problems besetting the company including a “deteriorating outlook for the PC market” due in part to the cannibalization of PC sales by smartphones and tablets. It also mentioned a faster-than-expected decline of PC sales into emerging markets, uncertainties around Windows 8 adoption and slower Windows 7 upgrades. As a result of all that, Milunovich is reducing his earnings estimate for Dell’s 2014 fiscal year from $1.70 to $1.30 and cut his estimate for the following year to $1.12.

The Boston Consulting Group, according to the proxy, warned Dell management of a shift to cheaper products and services in its “end user computing” (EUC) business. BCG concluded that “as a result of a likely persistent decline in the premium segment of the EUC business, unless [Dell] changed its strategy to become more competitive in the lower-margin segment… [it] would require years of aggressive restructuring in order to maintain its value, and would face the risk that its decreasing scale would render it less competitive.”

BCG said Dell’s Enterprise Solution and Services (ESS) business also to invest in research and development and hire a bigger sales force. As we all know R&D and enterprise sales folks are pricey. All Things Digital has more on the proxy’s depressing take.

DELL data by YCharts

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FWIW, Mark Hurd squelches Dell rumors

Barb Darrow — Tue, 26 Mar 2013 14:08:41 +0000

This is what happens when you’re a high-profile job switcher, especially in the gossip-mad tech world. People talk about you. And that’s what happened to Mark Hurd.

Reports surfaced last week that Hurd, who is co-president of Oracle, was on the short list of prospective Dell CEOs from Blackstone Partners, a private equity firm interested in buying Dell. Blackstone, presumably, would need to install its own guy if its bid against the current Dell guy, Michael Dell, wins the day.

Asked about the issue in Japan at a press event, Hurd said: “I’m very happy at Oracle. No interest.”

Mark Hurd in Japan goes on the record on #Dell: “I’m very happy at Oracle. No interest." #oracle http://t.co/pYsKAM9fDK—
deborah hellinger (@dhellinger) March 25, 2013

Of course, that doesn’t mean Blackstone didn’t ask.

The timing must have been awkward for Hurd. Later today, his boss, Oracle CEO Larry Ellison, and systems guy John Fowler will unveil the latest-and-greatest Oracle server. If you want to sit in, you can register here.

It doesn’t help when a humongous software company is trying to build hardware credibility for there to be rumors about one of your top guys — a hardware guy — jumping ship to another hardware company. Hurd is the former chairman and CEO of Hewlett-Packard who exited under a cloud in August, 2010. A month later he was snapped up by Ellison as Oracle co-president (with Safra Catz)

First line of Blackstone/Michael Dell meeting: "So, yeah… sorry for calling Mark Hurd before we called you."—
(@danprimack) March 26, 2013

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Dell acknowledges two more bids

Barb Darrow — Mon, 25 Mar 2013 14:57:51 +0000

Dell’s board acknowledged Monday morning that it received two more buyout bids and vowed to consider them in the best interest of shareholders. As has been reported over the past week or so, The Blackstone Group and Carl Icahn prepped their own bids to counter a $24.4 billion (or $13.65 per share) offer put together by company founder and CEO Michael Dell and Silver Lake Partners to take the company private.

Icahn, who owns what is thought to be about 6 percent of Dell shares, is offering up to $15 per share for a $2 billion piece of the company. The Blackstone-led group is offering $14.25 per share. All Things Digital has more here.

Both the Icahn and Blackstone offers are for a controlling stake in the company, not the whole thing. They would leave some shares to trade publicly.

The gist of Dell’s statement linked here is:

“The Special Committee, consisting of four independent and disinterested directors, has determined, after consultation with its independent financial and legal advisors, that both proposals could reasonably be expected to result in superior proposals, as defined under the terms of the existing merger agreement. Therefore, each of the Blackstone and Icahn groups is an “excluded party” and the Special Committee intends to continue negotiations with both.”

Michael Dell founded the company nearly 30 years ago and built it into what was at one point the world’s biggest PC maker and a huge power in servers as well. He stepped down as CEO in 2004 but re-assumed that role three years later.

The company’s problem is that like rival Hewlett-Packard, it missed the boat in tablets and smartphones at a time when those devices started to outsell laptop and desktop PCs. Over the past few years, though the company has added a lot of software, storage and cloud computing expertise via acquisitions of companies like Quest Software, Boomi, EqualLogic and Compellent. It also bought more services expertise by acquiring Perot Systems.

Michael Dell himself owns an estimated 16 percent of the company.

The bidding war signals that at least two parties see the Dell offer undervaluing the company. Whether the rival buyers would keep the company intact or sell off the piece parts down the road remains an open question.

The Wall Street Journal blog outlines several scenarios that could play out.

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Hurd? Capellas? Let’s be bold. How about Gerstner, Bradley, Bartz, Otellini as new Dell chief?

Barb Darrow — Mon, 25 Mar 2013 01:28:32 +0000

As a couple of private equity firms sorted out their bids for Dell last week, a few names bubbled to the top of the list of prospective new (that is, non-Michael Dell) CEOs.

Former IBM CEO and Chairman Louis Gerstner.

Blackstone, a PE firm interested in bidding against Silver Lake Partners and Michael Dell for the company, reportedly reached out to Mark Hurd, co-president of Oracle and former CEO of Hewlett-Packard, Dell’s nemesis. Hurd is charged, in part, with making Oracle’s hardware business as margin-rich as its software business, and so far that effort has been underwhelming. Financier Carl Icahn is also pursuing Dell, according to published reports.

Some have also mentioned Michael Capellas, the former CEO of Compaq who helped engineer its sale to HP for $25 billion in 2001. Then-HP CEO Carly Fiorina drove that deal. Capellas was more recently involved with The VCE Co. created by EMC and VMware.

Dave Donatelli, EVP and GM of HP’s Enterprise Group.

But seriously people, if we’re going to play guessing games, let’s really play. Hurd and Capellas? Puh-leaze. Why not Louis Gerstner? Gerstner, who is credited with turning IBM around during his tenure there, has “got one more in him,” according to one of my panel of experts on Twitter.

Or how about Todd Bradley, HP’s PC guy who was passed over as CEO at least once and perhaps twice. What better way to strut his stuff than to reinvent HP’s biggest PC-and-server rival?

Former HP CEO and Chairman Mark Hurd

Or Dave Donatelli? The HP storage-and-servers guy is clearly not afraid to jump ship. His departure from EMC for rival HP in 2009 sparked a lawsuit.

As EVP and GM of HP’s Enterprise Group, Donatelli is responsible for “the development and delivery of server, storage, networking and technology services solutions”. That pretty much sounds like Dell’s mission statement — except for the enterprise part. As Dell’s president of software told me a week ago, Dell is more focused on SMBs than the largest enterprises, where IBM reigns.

Todd Bradley, EVP of HP’s personal systems and printing group.

And heck, if former HP CEOs carry a premium (why that might be is a mystery to some), why not Fiorina herself?

Others think Gerry Smith, who heads up Lenovo’s U.S. operations, would be an interesting pick. Or Carol Bartz, former CEO of Autodesk and then Yahoo.

Or, Y.K. Kim, CEO of Samsung Electronics America. Now there’s a company that knows from success.

Intel’s outgoing CEO Paul Otellini could be looking for work.

But, since Dell is fashioning itself as a sort of IBM for the small and medium business (SMB) set, it really needs more Software-as-a-Service (SaaS) expertise. Maybe they should hire someone from Saleforce.com or Box?

One of my Twitter experts put it this way: ”The market for SMB is pure SaaS plus cloud and only enterprises, [service providers], and government [accounts] will be buying hardware,” he noted.

If the new bids from Blackstone and activist Carl Icahn gel, Dell’s board has a few more days to sort through them and make its decision. Dealbook has a good explanation of the process as it will unfold now.

Of course, this new CEO discussion, as entertaining as it is, may be moot if the Michael Dell and Silver Lake Partners buyout bid wins the day. If that’s the case, presumably Mr. Dell will remain CEO if he so desires. If not, let the games begin again.

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Reports: Blackstone and Icahn jumping into fight for Dell

Barb Darrow — Sat, 23 Mar 2013 17:59:57 +0000

Dell may have more than one serious suitor come Monday. After weeks of rumblings, the Blackstone Group and investor activist Carl Icahn are preparing their own rival bids to the Michael-Dell-and-Silver-Lake-Partner $24.4 billion buyout offer, according to reports on Saturday. There has been grumbling since that proposition was made public that Dell is worth more than the $13.65 per share that Mr. Dell et al. are offering. And now some potential purchasers are presumably ready to put money where their mouths are.

Dell sweepstakes gets more interesting

Bloomberg News, which has been on top of this story from the get-go, now reports that the Blackstone Group made a tentative offer for Dell late Friday, in time for the midnight deadline. The Wall Street Journal subsequently posted that activist investor Icahn, who has a 6 percent stake in the PC-and-server maker, is likewise making a bid. Both Blackstone and Icahn have been reportedly in the hunt for weeks. Icahn and others have said Dell is worth up to $20 per share.

None of the reports named their sources and none of the companies offered comment. A Dell spokesman had no comment.

Dell’s private equity backstory

Dell management has connections to both Blackstone and Silver Lake. Dave Johnson, who Dell poached from IBM in 2009 to head up its acquisitions strategy, left Dell for Blackstone in January. John Swainson, now president of Dell’s software group, consulted with Silver Lake Partners.

As one former Dell exec said via email: “So there you have John Swainson, previously Silver Lake and currently at Dell and Dave Johnson previously at Dell, and currently at Blackstone. Add Marius Haas previously KKR and now at Dell, and you have a pretty interesting PE clique there.” Haas is VP of Dell’s Enterprise Solutions group.

According to the Journal‘s sources, the entry of new bidders will extend Dell’s “go shop” period for another four days.

Mark Hurd? Seriously?

Adding more intrigue to the mix, Fortune reported last week that Blackstone Group might tap Mark Hurd, Oracle co-president, to lead Dell. That raised eyebrows. Hurd left Hewlett-Packard, where he was chairman and CEO, under a cloud of accusations about sexual harassment and misuse of company expense accounts.

HP rival Oracle then hired Hurd, presumably for his hardware expertise and possibly because Oracle CEO Larry Ellison wanted to taunt HP Chairman Ray Lane, a former Oracle president. That Dell, which competed tooth-and-nail with HP for PC and server market leadership, might be run by a former HP guy would be ironic.

It’s also not at all clear whether ownership by a private equity firm will right Dell’s course. It’s missed a lot of opportunity by being late or ineffectual in the mobile device and tablet market — areas where HP has also missed the mark.

Hurd is often mentioned as a successor to Ellison at Oracle. But the tech world is littered with former successors to Ellison who are now elsewhere. Just ask Charles Phillips or Tom Siebel or Gary Bloom or Marc Benioff. Or Lane. It’s by no means a certainty that Hurd will be any more successful and he may be looking for an out. Especially since, as one Wall Street analyst put it, Oracle’s promised hardware turnaround has failed to materialize.

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Dell buyout just got (much) more complicated

Barb Darrow — Thu, 07 Mar 2013 17:42:45 +0000

If Michael Dell and his cohorts at Silver Lake Partners thought their $24 billion buyout plan for Dell announced a month ago would be a slam dunk, they have another think coming.

Several other interested parties have surfaced, including billionaire Carl Icahn, and when Icahn gets involved things definitely get more complicated. In a letter to Dell’s board Icahn said the existing offer substantially undervalues Dell’s worth. Icahn put forward his own suggestion that the company remain public and issue a $9 per share special dividend, as reported in Bloomberg. Blackstone Group LP has also reportedly expressed interest in Dell.

If Dell’s board does not agree to his proposal, Icahn vowed “years of litigation.” He is not the only disgruntled shareholder. Southeastern Asset Management, which owns about 8.4 percent of Dell shares, maintains that the “take-private” price of $13.65 per share is not enough and reiterated its “demand that the Board of Directors pursue proposals that are more favorable to shareholders,” according to a note from Wells Fargo analyst Maynard Um. As of Thursday Dell shares were trading at $14.27, well above the offer price.

DELL data by YCharts

Dell hardware rivals Hewlett-Packard and Lenovo have also taken an interest in Dell, although whether they’re doing so more to get a chance to gather competitive intelligence from Dell’s books or if they’re genuinely interested in an offer is a huge question. The thought of HP buying Dell after its recent travails is mind boggling, but then again it’s done a lot of mind-boggling things over the past few years.

One former Dell executive, speaking on condition of anonymity, has been critical of the buyout from day one. In his view, this deal was done solely to benefit the new owners at the expense of shareholders. “The management team will trim the fat and resell [what's left] in a better operating margin scenario … Dell is playing out the buy low, sell high scheme,” he noted. However, he also maintained that the risk is high for the buyers. Things are changing fast, and the market may be cleverer than they are, he added.

It is somewhat astonishing that Dell, once the world’s largest PC company, finds itself in these straits. But then again, legacy players from the last IT era — HP, Cisco, Microsoft, Oracle and IBM — are all in the same boat. The technology world has shifted under their feet to a world of low-priced scale-out hardware and open source software with substantially lower margins. The advent, first of virtualization and then cloud computing, means that individual companies no longer have to buy nearly as much hardware gear as they used to and it’s by no means clear that all of these legacy powers will survive, let alone prosper.

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Welcome back, Michael Dell: It’s time to reclaim your name

Om Malik — Wed, 06 Feb 2013 05:34:13 +0000

A lot is being said and a lot will be said about Michael Dell’s decision to take the company he started in 1984 in his college dorm room private (with some cash from Silver Lake Partners, Microsoft and other investors.)

People are also going to point out that karma is a bitch. Others will say that the cloud will prove to be the ultimate undoing of Dell, and that mobile is Roundrock, Texas-based company’s Achilles heel. I would agree with some if not all of those assessments. I would also be hard pressed to ignore the harsh reality of tech-land — turnarounds rarely turn.

And despite knowing all that, I cannot help but applaud Michael Dell, the founder.

Dell is doing what few people do — putting both his reputation and his fortune on the line in order to save and perhaps revive the company with whom his name and legacy will always be intertwined. This is high-stakes poker: he is putting millions of dollars of his own money in addition to investment from his investment firm, MSD Capital, on top of kicking in his stake in Dell.

He doesn’t need to do any of this. If someone else made the very same offer he is making for the company, he stands to be a few billion dollars richer. Dell is filthy rich and his empire is spread wide and far. There is a lot he can do with his time — politics for example. (If HP alums Carly Fiorina and Meg Whitman can think about political careers, why not Michael as governor of Texas.) The fact is that the next three to four years are going to be hell for Dell.

While the company has made some bets on cloud technologies, and there are ways (as Derrick Harris spells out in his article) out of this gloom, Dell is not on the sunny side of the street by any means. The big infrastructure buyers like Google and Facebook are looking to upend the server business. The battle for Dell is not just Lenovo and Hewlett Packard, but it is also Amazon, Microsoft, Cisco and Apple.

This is Dell’s Battle of Britain. This could be his finest hour or it could be him and his ego, like Butch Cassidy and the Sundance Kid’s last stand against the Bolivian army. Who knows.

So why do it? My explanation — you don’t really have a rational choice, so you make an emotional choice. As a founder whose name adorns the shingle outside the door, Dell is playing a high stakes poker to literally save his good name. Just the idea that some faceless Asian company would own “Dell” the brand and his name is anathema.

Every so often people say that its not personal, its business. Nonsense! It is always personal and it will always be personal. If you spend your lifetime nurturing and growing a startup, it is nothing but personal. Outsiders will never understand — for a founder, failure, defeat and ignominy are always personal, just as success and fame. For founders, our identities are intertwined with the companies.

Think of it this way — when you start a company and spend about 15 hours a day on the company, that is more time you spend with your family. I have more memories of my startup than I have of my own life. I can’t remember a single birthday over past seven years, but I can tell you who said what and when and why. And that is just us, a tiny little company. That is why I disagree with the theory offered up by the otherwise admirable Ashlee Vance at BusinessWeek on why Dell is doing what he is doing:

The worst-case scenario for Michael Dell would have occurred if an activist shareholder had gotten into the mix. Dell would have faced the prospect of being kicked out of the company that bears his name. I’m certain this is why Dell went private. Dell, Silver Lake, and Microsoft get a company that pumps out enough cash to keep all parties happy, while Michael Dell shields himself from being berated by analysts, investors, and the media. Best of all, he gets to keep his company.

Admittedly, my explanation is tinged with bias of a founder whose name hangs on the door of his shop. And yes, it is a bit of an emotional explanation, but I get it.

And that is why I want to applaud Dell and welcome him back to the founder fold — this is where it starts. Good luck… for you’ll need heaps of it on your mission impossible.

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The Dell deal is done: Company goes private in $24.4B transaction

Barb Darrow — Tue, 05 Feb 2013 14:33:41 +0000

Private equity firm Silver Lake and Michael Dell are officially acquiring Dell, the world’s third-largest PC company, for $13.65 in cash in a deal worth about $24.4 billion.

Dell’s board unanimously approved a merger agreement under which Mr. Dell, the company founder and CEO, and Silver Lake have acquired the Round Rock, Texas-based company.

Mr. Dell, who owns about 14 percent of Dell’s shares, recused himself from discussions by a special committee of independent directors that was considering the deal, according to a statement e-mailed by Dell at about 6:30 a.m. PDT Tuesday morning. Financing includes a $2 billion loan from Microsoft.

According to Dell’s statement:

“A Special Committee was formed after Mr. Dell first approached Dell’s Board of Directors in August 2012 with an interest in taking the company private. Led by Lead Director Alex Mandl, the Special Committee retained independent financial and legal advisors J.P. Morgan and Debevoise & Plimpton LLP to advise the Special Committee with respect to its consideration of strategic alternatives, Mr. Dell’s proposal and the subsequent negotiation of the merger agreement.”

Reports that this deal was in the works surfaced more than a week ago, sparking questions about whether Dell could recover its mojo under a new arrangement. The company once led the world in PC sales and was a strong contender in servers. But in the past few year it, like other PC-and-server rivals, missed the boat in the shift to tablets and smartphones.

The fact that Microsoft’s participation comes in the form of a loan rather than an equity investment may be telling. Microsoft’s role in a new privately-held Dell has been the subject of much speculation. Dell has been a staunch Microsoft ally, preloading Windows and other Microsoft software on most of its gear.

But Microsoft, which also misplayed the tablet-and-smartphone transition, decided it would manufacture its own Surface devices, rattling its erstwhile hardware partners. Many of them, including Hewlett-Packard, Samsung, and Acer, now offer devices running Google’s Chrome OS, a Windows competitor. Skeptics think that a Microsoft with an ownership stake would have treated Dell as a captive audience for its software going forward. We’ll have to wait and see what input Microsoft, as a creditor, will have on Dell’s ability to play the field in software.

This story was updated continuously Tuesday morning with additional detail.

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