Michael Dell’s remarkable reshaping of Dell
CEO’s years-long plan culminates in $67B acquisition of EMC in biggest tech deal ever
Don’t be distracted by Dell’s dazzling $67 billion takeover of EMC.
Sure, it’s the largest tech deal ever but it’s all part of a years-long plan carefully laid out by Michael Dell.
In many ways, the deal’s sheer size caps what has been a quixotic quest by Dell, 50, to reshape the company he founded into a computing juggernaut. EMC’s storage and software businesses makes Dell the No. 3 player in enterprise technology by revenue, trailing Hewlett-Packard and IBM.
“The combination of Dell and EMC will create the industry leader” in the $2 trillion infor- mation technology markets where they have complementary portfolio technologies and other resources, Dell said during a conference call Monday.
The Round Rock, Texas-based Dell also intends to capitalize on the ubiquitous Internet of Things, sensor-enabled devices and wearable devices that are likely to number in the tens of billions within a few years. “It’s an exciting opportunity,” Dell told USA TODAY in May 2014. “Anything that creates more nodes and data means potentially selling more servers, storage and networking gear.”
It has been six years since Dell audaciously pursued an enterprise strategy. It acquired executives — such as Computer Associates CEO John Swainson and former HP executive Marius
Dell always has been a maverick, opting to take his company private before undertaking such an audacious task to remake Dell, a company he founded in his dorm room at the University of Texas.
Haas — and snapped up more than two dozen companies, including Wyse Technology and SonicWALL. It also stepped up investments in research and development, through its Dell Research Division and Dell Ventures.
Despite the steep acquisition price, Dell-EMC fits a bold blueprint established by Dell. He took his company private in a $25 billion deal in October 2013 after a bruising, year-long battle with activist investor Carl Icahn. The showdown was essential to the survival of the company, Dell insisted, after it embarked on a shape-shifting mission to diversify into data centers, cloud computing, servers, software, services, security and system management.
What followed was a reinven- tion of the company that made its name — and fortune — selling personal computers in a world increasingly beholden to smartphones and tablets. It was a challenge Dell relished after feeling handcuffed by expectations from the market for a public company undergoing a significant makeover.
“The market encourages (public companies) to not make investments in new areas,” Dell, wincing at the notion, said in an interview in Austin in May 2014. “It is short-term focused.”
Dell signed partnerships with Dropbox, Microsoft and Google to work on cloud computing, and it created a $300 million venture capital fund.
Of course, tech megamergers are treacherous endeavors. Consider HP-Autonomy and other big deals that backfired, leading to massive write-offs and layoffs.
Then again, Michael Dell always has been a maverick, opting to take his company private before undertaking such an audacious task to remake Dell, a company he founded in his dorm room at the University of Texas. In the mid-1980s, Dell grasped the potential for selling PCs directly to consumers when most personal computers were sold via distributors and retailers. Though others quickly followed, they eventually faded. By 1992, Dell — then 27 — earned the distinction as the youngest CEO of a Fortune 500 company.
“Thirty years ago, I made a decision to leave school and pursue my dream. I didn’t know the impact we’d have on the world,” the Dell founder wrote in a letter to employees in 2014. “We innovated a better way to make, sell and support technology — and the rest, as they say, is history.”