Microsoft it was earlier revealed had pledged a significant amount of money to push private equity firm, Silver Lake Partners, bid to take over Dell. The software giant is preparing to add $ 3 billion of its own money into the takeover bid.
So what does Microsoft really want from this deal. Well according to an article written by Marty Wolf for Yahoo! Finance, Microsoft is not looking for a chunk of Dell’s declining PC sales but rather wishes to get a piece of Dell’s growing cloud and enterprise IT services segment.
According to Wolf, Microsoft sees enterprise IT services as a big part of its future and is making the investment as a strategic bet while also getting a meaningful influence over one of its closest business partners. He said:
“Dell’s transition to services also creates other opportunities for Microsoft in the cloud, big data and virtualization — all areas that are part of Microsoft’s future in the enterprise space. Microsoft can theoretically end up with a services provider—not dissimilar to its relationship with Avanade in CRM.”
Dell through the leveraged buyout is looking to gain the flexibility of a start-up while keeping its resources intact. This will help the PC manufacturer to react much quickly to the demands of the market. With PC sales declining due to the popularity of the tablet as well as the lukewarm reaction to Microsoft’s launch of Windows 8, it is no surprise that both firms are looking to change things around.
Microsoft is also struggling with sales of its own Surface tablet and the deal with Dell might help it to synergise its own strategy with its biggest partner.
Source: eWeek
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