Subject: General Tech | February 6, 2013 - 05:53 AM | Tim Verry
Tagged: wall street, OEM, microsoft, dell
Dell, ranked third in terms of global market share, has announced that it is entertaining a buyout offer by CEO and founder Michael Dell and his associates. The $24.4 billion deal will see Dell leave wall street and return to a privately held company. Michael Dell has managed to secure funding for the buyout offer, which amounts to $13.65 per share.
Funding sources for the buyout offer includes:
- Cash and equity from Michael Dell and Dell cash on hand.
- Cash from Silver Lake
- Cash from MSD Capital
- A $2 billion loan from Microsoft
- A rollover of existing debt
New debt financing compromised of
- Bank of America Merril Lynch
- Credit Suisse
- RBC Capital Markets
The deal will leave Dell with $15 billion of new debt, but it will also allow them to go in new directions and focus on long term goals. Dell will no longer be forced to focus on short term growth and profitability over long term goals to keep stockholders/wall street content. It is an interesting move on Dell's part because traditionally companies do the opposite: transition from being privately to publicly held corporations. Michael Dell is at the forefront of the buyout offer and should it go through, Dell will remain the CEO of the now-private company. The deal is expected to close by the end of the company's second fiscal quarter (July 2013)-- though the board does have 45 days to solicit alternative offers.
According to the New York Times, Michael Dell wrote the following memo to employees.
“Dell’s transformation is well under way, but we recognize it will still take more time, investment and patience. I believe that we are better served with partners who will provide long-term support to help Dell innovate and accelerate the company’s transformation strategy.”
It is an interesting move, and hopefully Dell will be able to turn its luck around, and gain back its lost market share. Many enthusiasts are wondering whether or not the $2 billion loan from Microsoft suggests the software giant has a special interest in the OEM--and whether that means Dell will become some kind of premium partner for Windows and/or Windows Phone devices.
That is certainly one option, but it is not the only one. While I think Dell will continue to produce Windows-powered computers, there is also the growing popularity of Linux to consider. Dell could continue to produce Windows PCs without going private, but pursuing Linux in a big way might be one reason to do so. Dell has traditionally been supportive of the open source Linux operating system with initiatives like Project Sputnik. While it would not happen overnight and would require quite the effort, Dell could do for Linux what Apple has done for Unix with OS X.
It could focus on a premium line of computers running a Linux-based operating system along with quality customer support. It may be an unlikely option compared to the suggestions of a Dell and Microsoft premium partnership, but it is not completely without merit.
Why do you think Michael Dell is transitioning Dell to a privately-held company? Will Dell cozy up to Microsoft for the next Surface, is there some other grand plan in the works, or is the answer more simple?
Subject: General Tech | October 3, 2012 - 11:06 PM | Tim Verry
Tagged: Thinkpad, production, OEM, Lenovo
In an interesting move, PC OEM Lenovo has announced that it will be moving a small portion of its production lines to the United States. The company will be opening the production line in its recently expanded 240,000 sq. ft. US distribution center to add capacity for a production line that will produce Think-branded computers. That includes Thinkpad notebooks, tablets, desktops, workstations, and servers. Lenovo CEO and Chairman Yuanqing Yang stated the following in the company’s press release.
“Lenovo is establishing a U.S. manufacturing base because we believe in the long-term strength of the American PC market and our own growth opportunities here.”
Lenovo believes that the new facility would create 115 new jobs. It has further stated that the move to US production of its OEM machines will enable the company to provide faster delivery to US-based companies and educational institutions. That might give Lenovo a small advantage when bidding against other companies for large contracted orders.
The result of a $2 million investment, the new production line is expected to open in early 2013. It will be located in Whitsett, North Carolina. Reportedly, hiring for the 115 new positions will begin later this year.
More information can be found on the company's website.
Personally, I think it’s a great thing to see manufacturing come to the US, even if it is not a huge number of new jobs – it’s a good start and if Lenovo sees potential it may move more of its production capacity over here.
Microsoft prepares Skype to be preinstalled on Windows 7 PCs They also ignore the latest version of Skype
Subject: General Tech, Systems | May 31, 2012 - 03:33 PM | Scott Michaud
Tagged: skype, OEM, bloatware, crapware
Just after their $99 Signature service has been announced, Microsoft has provided OEMs with a version of Skype to be pre-installed on Windows 7 PCs. I wonder if they will take it off again if you pay them?
Just… give me a minute…
So Microsoft hates bloatware unless it is theirs. OEM partners have been paid by software vendors to provide demos of products integrated and pre-installed for the end-user. Commonly you will see a few game demos, the Kindle software, an antivirus trial, and Skype. Earlier in the month Microsoft created a service at their retail outlets to scrub computers clean of the bloat for $99.
And now that they own Skype they desire for OEMs to integrate it with Windows 7…
Here’s my dotted line for your Signature.
More humorous is that they will integrate Skype 5.8 rather than the newer Skype 5.9. Granted, it is unsurprising that a company would be slightly behind in versions particularly since the latest dot-release is less than two months old. Skype has been known to be slightly less desirable as you increase in version number and as such makes me crack a smirk either way. The latest release in particular has allegedly been the cause of minor glitches in recent podcasts with TWiT studios recommending rolling back to 5.8.
If anything this makes me slightly curious about Windows 8.