
Michael Dell buys back PC company he founded in $24.8bn deal - cake
http://www.theguardian.com/technology/2013/sep/12/michael-dell-buys-back-pc-company-founded
======
Samuel_Michon
Companies that are publicly traded are under constant pressure to increase
profit. DELL becoming a privately held company allows them to relieve some of
that pressure, especially with Michael Dell being a large shareholder.

The PC market is shrinking as individuals and enterprises alike are relegating
more and more tasks to smartphones and tablets. The useful life of a
desktop/notebook also continues to be lengthened. DELL will continue to sell
computers and make profit, but unless they change their focus significantly,
they won't be a company that the stock market would love.

I think they made the right decision. if they turn around and become the next
Apple or Lenovo, they could always go public again.

~~~
beautybasics
\- It's ok if a "horse carriage" manufacturer goes private after cars became
commonplace

\- But Ford doesn't need to go private because Toyota came along

~~~
Samuel_Michon
The last time I checked (2 minutes a go; I like to be sure), Ford wasn't doing
so well. In recent years, they’ve had to sell a lot of their brands and all of
their components factories. They're in debt and are selling half as many
vehicles as they were a decade a go.

Going private wouldn't be a bad idea. Even better would be to sell the company
to its employees. That has worked very well for similar companies.

~~~
yardie
More like 10 years ago. Your information is about 6 years out of date. They
sold or suspended money losing brands like Jaguar, Land Rover, and Volvo. They
refinanced the company back in 2005 by selling their factories and renting it
back from the new owners. Nothing changed, just the title on the deed, and
they were hundreds millions of dollars richer. At the congressional autos
bailout hearing they were there to to support GM and Chrysler in acquiring
TARP loans. Because if either of those companies failed it would send a
shockwave in the supply chain.

> Even better would be to sell the company to its employees. That has worked
> very well for similar companies.

American Airlines is employee owned and that has worked out smashingly, not!

$190B assets / 170k employees = $1.11mm/employee. I doubt the average line
worker has that kind of money on hand.

~~~
easytiger
> Jaguar, Land Rover, and Volvo

I'm not saying it is indicative of anything, but having been released from
Ford those brands are now doing very very well.

~~~
woobar
All three are parts of big asian holdings now. So it hard to tell how good are
they on their own.

\- Volvo is losing money

\- Jaguar lost 60% of unit sales in last 10 years.

\- Land Rover actually improved, up 30%

------
akmiller
Some of Dell's hardware seems to be getting better again. I just purchased the
Dell XPS 12" and I'm mostly satisfied with the computer (although it's a bit
expensive).

However, there are two things that still drive me crazy about Dell. The first
one should be easy to fix which is that the website is absolutely awful. It's
slow, many links 404 and overall just a very frustrating experience. It took
me awhile to get my computer ordered because of how slow the site is and I
almost gave up.

The other issue is the fact that I have to wait about 2 weeks for my computer
to be built and shipped to me. Most of their computers they don't even allow
many configurations so why can't they have pre-built machines ready to ship.
The very day I ordered my Dell, I ordered a Macbook Air for my wife which
shipped in 2 days.

Dell has been pretty consistent force on the server side, but I'd like to see
them regain some strength in the consumer laptop market again.

~~~
cantrevealname
There's a very good idea on Dell's website that I haven't seen on other laptop
sites: All Dell laptops have a sticker with a "service tag" (a 6-character
code that looks like, say, HYBVGX). You enter that code in the Dell website,
specify the OS (say, Windows/XP), and you can download all the drivers
_specific_ to your laptop configuration.

The idea is wonderful. For Lenovo laptops, by contrast, you have to somehow
know exactly what components are used in your laptop and then go hunt for
those drivers. (And no, I don't want to use Lenovo's mysterious automatic
update tools.)

I said that Dell's idea is wonderful, but the implementation is horrible
unfortunately: you have to download the drivers one-by-one (unless you're
willing to use their download manager), the order in which drivers are
installed matters and Dell doesn't tell you the order, the documentation on
what each driver does is very poor, they are inconsistently packaged (zip
files, exe's, installers), and sometimes you get offered, say, 3 wifi drivers
because apparently Dell doesn't know which wifi chipset was put into your
configuration.

Like I said, the _idea_ is great.

~~~
Samuel_Michon
> All Dell laptops have a sticker with a "service tag"

That seems very old-fashioned to me. Why should I have to type in anything at
all for the computer to know what its components are? Shouldn't it already
know?

Apple’s Software Update/Mac App Store knows what computer I use. Even with the
BTO Mac’s, the OS knows what components those computers have. The Mac App
Store never presents me with software that's not suitable for my computer. I
know x86 + Windows has way more possible configurations, but even there, it
should be possible to create a report of all the components and send it to
Windows Update (AFAIK, it already does that — why are you downloading drivers
from DELL’s site?)

~~~
Amadou
Sure, the computer knows the PCI-ID's of everything on the PCI-family of
buses. Same for usb. But you presume that the person downloading the drivers
is doing it from the same computer. If it needs a driver for its network
interface, then that is going to be a problem.

~~~
Samuel_Michon
> driver for its network interface

To me, that sounds like a Windows problem, not a DELL problem. No matter what
components your computer consists of, a basic Windows install should have a
suitable driver for your network card, at least to get online to get better
and more up-to-date drivers. In my experience, it always does. Maybe I've just
been lucky?

As for downloading drivers from a different computer, I think that's mostly
done by IT departments to manage numerous computers. Of them, it can be
expected they know what they’re doing, and making the process easier could
obviate their job, so I suspect they like the way it is now.

~~~
pyre
> Of them, it can be expected they know what they’re doing, and making the
> process easier could obviate their job, so I suspect they like the way it is
> now.

If a Windows Update-type solution could be funnelled through a _locally
controlled_ central server for large installs, then the IT department could
approve each update, and the local machines would automatically pull them
down.

I assume that something like this already exists (even if it's not tied into
Windows Update specifically).

~~~
jtmcmc
[http://en.wikipedia.org/wiki/System_Center_Configuration_Man...](http://en.wikipedia.org/wiki/System_Center_Configuration_Manager)
used by large IT departments to ship and deploy updates

------
davidw
I _just_ got an XPS 13 with Ubuntu. It's not bad, and the biggest defect, the
screen, is something it has in common with pretty much everything else out
there. Major props to Dell for providing a good computer that ships with
Linux.

[https://plus.google.com/111292429212746362343/posts/8xUpUXeT...](https://plus.google.com/111292429212746362343/posts/8xUpUXeTvPE)

~~~
stevewillows
I read your post. I totally agree with the squashed screens. It would be
awesome to have a fancy flip / rotatable screen to allow for more vertical
space.

Also, wtf is with the lack of pg up / pg dn ?! That's just weird.

~~~
stinos
Don't you get those using Fn+Up/Down? At least my XPS15z has them there.

~~~
davidw
Yeah, but I use them often enough that that's a PITA.

------
beautybasics
Michael Dell once said that poorly performing Apple should return money to
stock holders and shutdown.

What goes around..........

~~~
electronous
Interesting. I had never heard this quote.

~~~
nspragmatic
[http://news.cnet.com/2100-1001-203937.html](http://news.cnet.com/2100-1001-203937.html)

It was in 1997. Apple wasn't doing so well at the time.

~~~
seanl
"There is some concern that Apple will have a hard time recruiting a top-notch
CEO because of Jobs's presence." reads quite ironically too given how things
panned out.

------
nasalgoat
In the Enterprise space, there really isn't a solid competitor - HP and IBM
equipment is, to be blunt, terrible: I had a 50% DOA rate on 20 HP servers I
bought two years ago. In contrast, I've had zero on the $4M+ worth of Dell
I've bought since then.

That said, it only applies to their servers - the disk arrays and networking
equipment is all garbage. I hope this change won't result in making the one
thing that works worse.

~~~
rdl
It's kind of screwed up, but the #2 reliability hardware vendor I've found has
been Supermicro (tied with Dell, depending on model). Supermicro is also
super-cheap, and tends to make cool things like Intel developer machines.

I hate Dell desktops, although I do like their monitors. Dell desktops tend to
over-optimize on power supplies and other components, such that you can never
really upgrade them later.

~~~
harrytuttle
Dell servers are shit. Currently trying to source a disk for a 3 year old
poweredge which is stupid. Pay £700 for a Dell one or £122 fir a generic one
but the array won't build with the generic one as the PERC doesn't like it
(even though its the same model disk). Dell modify the firmware.

+1 for supermicro and they're fun to build as well as bomb proof

~~~
intorio
Are you running the newest firmware on the PERC? The firmware used to limit
you to only Dell certified drives but they removed that after about a year,
probably due to backlash. I know we told our rep we wouldn't buy the new cards
until they got rid of that.

~~~
rdl
I really want to get into the open hardware from Facebook, etc. I'd love cost-
efficient boxes with the right security features (ideally, a super-cheap HSM)
built in, along with either no RAID but enough SATA (to do sw raid), or areca
or 3ware chips built-in. Being able to get good 10GE or 4x bonded GE support
would be a huge plus, too.

------
virtualwhys
Please do NOT go under Dell.

Own a Dell Precision M4700 workstation (absolute beast of a laptop, i7 3840QM,
32GB RAM, 2X 256GB SSD), and 2 R610 1U rack servers in colo. I've been buying
Dell servers since 2005, never a problem, completely satisfied.

Their high end consumer, and mid-to-high-range server gear is pure quality, at
decent pricing to boot (if you can work a deal with sales rep., or find a
decent unit on Dell Outlet that is).

~~~
stinos
Having worked in a place using only their top-line products
(laptops,workstations and servers) since 2001, I can't stress how true this
is. That stuff is pure quality. Quite a lot of the machines that were bought
in 2001-2003 are still there, up and running (of course with second or third
batch of new hard disks). Those that are not there anymore were abandoned
because they became too slow for current standards, not because they broke.
Which basically means we're not sure of the actual lifetime yet since there
hasn't been any of the machines that just didn't work anymore.

Also extremely important: Dell obviously did quite some research in figuring
out which components work together well. This translates in close to zero OS
problems due to hardware goining nuts. In other words: no kernel panics, no
blue screens. Some people hardly belive this, but the only time I saw blue
screens/kernel panics in the past ten years was when doing stupid stuff
myself, never because of the machine.

(note: I cannot compare to other brands here, maybe they are as good as well -
I certainly hope so for their users)

------
Derbasti
I think this is terrific news. A publicly traded company has only one goal:
increasing short term profit (max one year). Thus, no long term investment is
possible any more.

Buying Dell back enables them to think long and hard about the future of
computing--to invest into the future. This makes me very hopeful that my next
computer will be a Dell: A well-designed machine that was not just a
marketing-driven reaction to what the others were doing, but a result of
thorough engineering and thoughtful design.

~~~
tadfisher
That is not true, and HN continually rehashes this argument. There is no law
or standard that a public corporation must maximize short-term shareholder
profit.

~~~
Schiphol
There certainly is no law, and I'm not sure what you mean by standard. But if
you work at any number of such corporations you will notice there certainly is
a robust trend.

------
jbpadgett
I feel like Dell had a great idea with the developer Linux laptop
[http://www.dell.com/learn/us/en/555/campaigns/xps-linux-
lapt...](http://www.dell.com/learn/us/en/555/campaigns/xps-linux-laptop).
Having a mainstream PC linux alternative to Mac is likely good for the market.
My thought was that the privatization move was part of a plan to offer more
products like this and less of Windows, but the MS investment to support them
makes that argument less viable
[http://www.electronista.com/articles/13/02/05/michael.dell.r...](http://www.electronista.com/articles/13/02/05/michael.dell.remains.ceo.becomes.majority.shareholder/).

------
vondur
I thought Dell had become big in the late 90's by mastering the supply chain
and cutting costs in manufacturing. When everyone else did that too, they
seemed to have lost their competitive advantage. Maybe Michael Dell has a plan
for them in this "post pc" world. I don't have faith that they will, but I
could be wrong.

~~~
dakotasmith
I believe Dell's suppliers also used the demonstrated advantages of Dell's
logistics to enter the market as competitors.

Also in the pre-2000s run up, Dell's pricing was premium, and with those
margins Dell provided better than average in-house, state-side customer
support, most (all?) of which was eventually dismantled as PC prices dropped.

Maybe when they aren't public, Dell will be able to invest heavily in R&D &
customer support without worrying about earnings per share for the next
quarter.

------
nobodysfool
Funny story about Michael Dell - He was a system builder, and my dad owned a
computer store that sold supplies to builders. So, Michael Dell came in, he
was just about 18 years old or something, just a kid. My dad taught him how to
build a computer, and Dell, he wanted to build his own power supplies. My dad
told him he was crazy, especially since power supplies are so cheap, they come
with the cases you bought anyway. Years later, I tried to convince my dad that
mail order was the way to go, but he grumbled about having to refund people
for a full 30 days after sale and how it would ruin his cashflow. That
business finally went under. Then he started again, and in 1999 I show him
that he could sell 2x the amount of computers if he sold on the internet.
Again, same grumbling about cash flows. That business went under. Now look at
Dell.

------
kenshiro_o
Carl Icahn must be a very upset activist investor now. I wish Michael Dell can
improve Dell's figures - I think they do make very solid hardware but their
profit margin in the consumer space are just too thin.

They either need to push more on the services front or become the Apple for
Windows powered systems, where they could sell stylish and great products at a
premium.

~~~
yuhong
I do wonder what would happen if "profit margin fixing" was legal.

------
wslh
I wonder why similar posts sticks or not. Is it theguardian.com domain/time? I
am really interested in this news.

My past submissions:

\-
[https://news.ycombinator.com/item?id=6376364](https://news.ycombinator.com/item?id=6376364)

\-
[https://news.ycombinator.com/item?id=6373609](https://news.ycombinator.com/item?id=6373609)

~~~
untog
It's almost always time. There are peak times when lots of people use HN and
upvote- if you submit outside of those times your link is likely to decay
quickly.

(That said, I wouldn't be surprised if there was a negative factor associated
for forbes.com. They've basically sold out their brand to clickbait nonsense)

------
Pxtl
Dell has the brand power that they're not totally sunk. Honestly, I'm not
happy with my Dell hardware - I have a Dell laptop with a garbage speaker that
can no longer charge the battery, and it only lasted just over two years
(testing replacement power-supplies and batteries proved it was the port
itself that was fried). It looked nice, it was fun to use, but it wasn't built
to last.

This wouldn't be such a problem if Dell didn't go out of their way to use
proprietary hacks on their hardware.

But there are other industries where this is totally okay. Gaming. Set-top
boxes. Stuff like that. People expect those devices to be highly proprietary
and not serviceable.

Dell's Ophelia project could be a good move for them - use their brand-name to
sell Android-based TV boxes. That's a place where people still do the yearly
upgrade treadmill.

~~~
InTheSwiss
What model laptop? I am still using my Studio 17 laptop from January 2009 and
other than the hinge getting loose every few months (which means I need to pop
the plastic off around the screen and tighten again with a standard phillips
screwdriver) it has been the best laptop I have owned. It has outlasted my
ThinkPad's which is the biggest shock to me. Maybe I just got lucky but I
couldn't be happier with this machine. It has lasted way longer than I
expected it too considering it is a consumer laptop and not a business line
such as the Latitude. When I have to replace it I am not too sure what I will
do as now I expect my laptop to last me at least 5 years :-/

~~~
Pxtl
I forget the model name - something in the Inspiron line. I have a Vostro
desktop and I'm happy with it (even managed to drop in a low-power GeForce
video card without overloading the PSU), but the lappy has been a
disappointment. Although I've a family with small children, so I guess we're
hard on laptops (I've still got to swap out the keyboard on my wife's HP after
my daughter pried half of them off and broke the little plasticky bits needed
to re-attach them).

------
nateabele
For some reason the phrase comes to mind "I brought you into this world, and I
can take you out".

~~~
Samuel_Michon
From what I’ve read about Michael Dell over the years, I’d say he’s doing a
great job at that (taking the company out.)

This is the company that came up with built-to-order from their online shop,
fast deliveries while maintaining small inventory, and selling most computers
directly. Their computers weren't innovative per se, but their business
processes were. What have they done for us lately?

~~~
gametheoretic
Ask an IT guy. The internals on the 990 desktop series >>> the 960 series >>>
the whatever... 600-somethings, etc. Continual improvement, model after model.
When you're dealing with thousands of employees, ease of interchangeable
internals is a godsend. What have they done lately? Kicked ass.

~~~
Samuel_Michon
I was referring to:
[http://tvtropes.org/pmwiki/pmwiki.php/Main/WhatHaveYouDoneFo...](http://tvtropes.org/pmwiki/pmwiki.php/Main/WhatHaveYouDoneForMeLately)

Anyways, you speak truth. Microsoft and DELL are set up for enterprise. IT
departments love them and are right to do so.

However, the market is changing. Already, there are more smartphones than
traditional computers. Tablets are outselling traditional computers. Many of
those devices will need to connect to corporate networks. As a result, IT
management is changing. Because of BYOD, the needs of users are taking front-
seat to those of IT managers. They might not like it, but I believe the trend
is irreversible.

~~~
vacri
It's not just that. Computers are now "reliable" and "fast enough". The need
for the constant upgrade cycle has dissipated, because computers have at last
arrived at 'good enough for most'. Of course you can find edge cases for
higher needs, but you can't build a general business on edge cases.

For example, as an avid gamer, I was upgrading my computer in some way or
other every year or so for the past (nearly) 20 years... and four years ago I
bought a decent whitebox with a good video card. It still chews through new 3D
games just fine at 1920x1200. Sure, could be better, but only trivially. The
clear improvement-on-potential-upgrade is gone. I'm just now contemplating
upgrading my 64GB SSD c: drive because, frankly, win7 filled it early and it's
always been a pain to keep clear ('how' is beyond me) - but that's a software
storage pain, not much of a hardware limitation. I don't feel the need to
upgrade because the hardware is limited...

------
quest88
Dell's going to have to step-up their mobile front to stay competitive.

"Research group IDC said tablets will outsell all PCs in the three months to
Christmas, and by 2015 they will regularly outsell PCs as consumers' tastes
shift towards the more mobile format."

------
toblender
I wonder if Dell is trying to pull a Jobs, comeback and turn the ship around,
and do something wild like neuro interface computing... Or take the game
market by storm start producing XBoxOne/PS4 style consoles.

------
goombastic
Screen resolution is the biggest handicap with most laptops today. Looking at
my laptop screens after using the mobile reminds me of how good the screens on
mobiles are today. It made my laptop experience worse in comparison.

Meanwhile on mobiles and tablets, touch resolution & lag are the issue.

