We’ve been uncharacteristically rooting for Carl Icahn to pull Dell’s shareholders into the realm of reality, but we’ve rooted to no avail. Michael Dell has now officially been able to take his company private, which effectively means he has been able to take the company back for himself at a ridiculous bargain price that his shoddy work as CEO over the last several years has driven Dell’s share price to. We can’t say we are surprised. So many CEOs these days are hugely well-rewarded for their failures, so why shouldn’t Michael Dell be well-rewarded as well?
We’re truly mad about this. There is every possibility now that Dell the man will be able to quickly re-launch Dell the company with a new IPO, and the very same collection of dumb investors who just let it go for the song and dance that Dell’s mismanagement brought upon them will end up richly rewarding him yet again. That is the ultimate game that is being played here – take the still massive company private for a while, do a bunch of stuff no one has to actually spend any time reporting on, send the PR and marketing machines out to hype whatever Michael Dell decides he should do, and then run the table again with another IPO. Why do investors let this sort of thing happen?
In any case, what is done is now done. The questions now move on to whether or not Dell can succeed as a private entity – enough so that it can re-IPO.
What can we expect from Dell’s new privacy? Most likely we believe it will be a direct de-emphasis of Dell’s core enterprise businesses in conjunction with a direct shift to thinking fully about mobile tech, wearable tech and consumer-focused mobile devices (including smartphones and tablets). We will also likely see some “headline worthy” announcements of new mobile execs joining Dell, no doubt along with a few mobile/wearable tech acquisitions, and a massive emphasis on trying to make Dell hip.
Never Hip, Never Cool
That last point begs what we think is a very interesting question. Has Dell ever been hip a day in its now long existence? We believe the answer to that is no. Dell has never delivered anything we’d refer to as a “tech WOW” of any sort whatsoever that might ever be construed as hip or cool. This is the enormous problem Dell has had over the last few years.
As we’ve transitioned from an enterprise-driven to a consumer-driven tech model, Dell has been utterly lost. It has no clue how to respond to consumers. Being the “right-priced” PC manufacturer of choice has always been a strict financial issue for both enterprises and consumers where Dell purchases are concerned. No one has ever purchased Dell products because they are cutting edge, visionary, cool or otherwise hip. In fact Dell is – even more than Microsoft, and by a wide margin – the exact opposite of everything Apple has become relative to driving real vision and owning the hip and cool crown.
The company has remained steadfast (and we don’t use the term “steadfast” here in any positive way) in keeping pace with itself in its now long-stagnant approach to products. Dell is the antimatter to what has generated Apple’s success. The thing that drives us nuts is that Michael Dell himself is entirely responsible for this. And yet here he is, now at the helm of a private Dell, with all of the same Dell pieces firmly in place, along with the same management mentality that has caused the long stagnation. He’s come to it cheaply and at the expense of every last Dell shareholder – all of whom were being held hostage by it.
This ensures that nothing will change.
Whatever “star mobile and/or wearable tech names” the company might entice to join a private Dell will run into the same issues that the more overt Dell mobile hires – such as Motorola’s Ron Garriques – ran into. Garriques at the time was president of the very successful mobile devices division at Motorola (you remember RAZR, yes?) and became president of Dell’s then global consumer business, with responsibility for all of Dell's consumer products, including desktop and notebook PCs, software and all mobile devices, and product design and sales.
Sad to say, Garriques failed miserably and spectacularly at Dell. The same will happen to anyone who joins Dell and thinks he or she will be able to circumvent Michael Dell, who will insist on driving his own ideas on Dell’s future directions regarding both products and business development. Our prediction is that it will not be a pretty picture that ultimately emerges.
It’s Tough to Let Go
As does Microsoft, Dell needs entirely fresh thinking and entirely new management that can effectively dismantle the old Dell and deliver on a new Dell that can provide forward thinking and tech vision that our consumer-driven tech world can really get its collective around. That leadership does not include Michael Dell. Old is old!
Let’s be clear about something here in any case: Dell was a genius of his time and he isn’t “old” in terms of physical years. He fully deserves and fully earned his billions. But his thinking remains entirely old school for today’s world. In the 1980s and 1990s he had the magic necessary (though a magic that did not require a “being hip or visionary” component) to turn Dell into the powerhouse company it became. So too did Ballmer…once upon a time. But that time has passed both of them by. Neither can transcend those old days and that disqualifies them from – or should disqualify them from – any active roles in trying to take either Dell or Microsoft forward.
It’s tough to let go, we know. Or to stop chasing. But just as it is commonly acknowledged by numerous academic types that most mathematical geniuses are already over the hill by age 30, so too are most founding and/or very long standing CEOs over the hill when the next generation wave needs to be ridden. Steve Jobs was an extraordinary exception to this, and while it is true that Larry Ellison still actively and effectively rules the roost at Oracle, Oracle has yet to require being hip in today’s world.
When that time comes, Ellison will also need to bow out. And for the record, we aren’t fans of the super high tech world cup catamarans Ellison ushered into the America’s Cup world – we absolutely believe he’s ruined the race itself. That has come about through an extraordinary lack of global vision for the America’s Cup’s future.
Vision isn’t merely about pure technology – it’s about how that technology fits into our modern perceptions of the world and the ecosystems those perceptions are intimately related to. As much as technology works to define our modern world, we don’t believe the World Cup races (as an example of technology + ecosystems) have been properly redefined through technology – the entire America’s Cup ecosystem has been seriously damaged in this case. That is why and how we ended up with a three (!) catamaran race this year that mostly no one cares about.
Reading the Oracular Tea Leaves on Dell
That is a whole other story but it relates directly to Dell going forward as a private entity. The point is that Dell (both the man and the company) cannot simply rely on some Dell version of next generation technology. Dell also needs to figure out what the ecosystems it needs to play in will be, and how next generation products will effectively fit into these ecosystems – and make them better.
Dell has certainly now bought himself his privacy so that the investment world can no longer kibitz from the side or in direct ways that would affect Dell as a public company (e.g. clobbering the stock price). But privacy won’t help Dell to succeed going forward. Nor will any amount of the chest-thumping Michael Dell has already begun pushing out over his victory. There is simply too much of the “same ol’ same ol’” to overcome.
Apple and the exceptional Steve Jobs had such a unique and powerful set of visions that they were able to truly create something new - the huge success that is now the amazing iOS ecosystem and the products that drive it. Google and Samsung wish for the same thing but haven’t been able to deliver it. It would be a huge challenge for any true next-generation leader at Dell to deliver on this. It will be hopeless for Michael Dell himself to think he can pull it off. He cannot and will not.
Investors should have held on and unlocked share value as Icahn and several other larger investors were suggesting. Giving Dell back to an undeserving Dell at a bargain price is a travesty in our humble opinion.
TechZone360 Senior Editor
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