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Microsoft looking to invest in Dell? Possibilities are endless.

Dell Venue Pro

Ah, Dell. The famous PC manufacturer and temporary OEM partner with Microsoft on Windows Phone. The company has previously stated that there are no plans to support the smartphone industry and that it would continue to primarily focus on the PC market, but now Microsoft is reportedly in talks to participate in a deal to take Dell private, according to CNBC.

As an important partner, Microsoft views Dell highly with how the company has contributed to building a successful Windows PC ecosystem. According to CNBC's sources, Microsoft could be looking to invest $1-3billion in the deal and is in talks with Silver Lake and Michael Dell, who are working on said deal. It's also reported that Microsoft's investment would be mezzanine, or some sort of preferred shares.

The ability to get the necessary dosh in place to take Dell private is a difficult task, and is one which Microsoft could help out with. The company has also invested in other properties, including the likes of Facebook and Apple (back when it was struggling).

There's an issue with this potential deal as should Microsoft become an investor in Dell, it could hold influence over business, preventing potential reforms and new models. Not only that, but how would the rest of Microsoft's PC crew feel about such a deal? Would Acer, HP, Asus, Lenovo all cheer the company on?

We have to also look at this from a Windows Phone perspective. Dell has said it has no plans to head back into mobile anytime soon, but should Microsoft pump money into such a project being undertaken -- for Dell to produce Windows Phone 8 hardware -- we could well see some sparks of life. Dell Venue Pro II, anyone? With the Dell partnership, Microsoft would then have also have a foothold in the PC market.

It'll be interesting to see how this plays out and what Microsoft would have planned post-closure of the deal.

via: Bloomberg

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Reader comments

Microsoft looking to invest in Dell? Possibilities are endless.

75 Comments

At least they had the balls to release an interesting form factor. There are many boring slabs of phones out there and they broke that mild. I never owned one but was quite interested in it, but what held me back was not getting to physically use one prior to purchase, so bought the LG Quantum instead. Long live physical keyboards!

I agree.  I thought the Venu Pro was an amazing looking defice at the time.  I would have instantly gotten one.  In the end it came down to AT&T over T-Mobile so I got my Focus instead.  Looking back, as the guy above me says, I probably dodged a bullet.  The Venue had too many issues and I found quickly that the WP onscreen keyboard erased my desires for a physical keyboard.

I had one, the phone itself was amazing. But my god Dell is not a consumer company. They need to rot in hell for their horrible support of the phone and their support for the customer. My dell had reboot problems and so I tried to get a replacement, but the whole support process is so bad that it wasn't worth it. I personally am not going to purchase dell hardware again whether it be phone or pc

Microsoft should invest in courting game developers and fixing xbla issues on windows phone before diverting their focus, dell and hp are dying, no need to invest

I agree. There are other more important issues on the Microsoft table that greatly need attention. Especially in the WP business.

Thanks a lot. I got angry when i read that. MS should be happy Nokia is helping them out cos were it not for nokia i wouldn't have been able to get over the abominations present in the wp8 experience. They should take an example of Rim, thats how they should have gone about wp8.

The tone to all of this is just ridiculous. 
If they choose to help make Dell private, that's a good thing.  PC OEM's have been trying to find their way through this particular tech generation and being able to let loose a little bit and try more form factors and product types without having to do with share holders might just be the catalyst for that.  Add to that, Dell has a strong hold of the enterprise sector.  It wouldn't be a bad thing to see an established name make room for themselves to innovate more.

Microsoft should invest in courting game developers and fixing xbla issues on windows phone before diverting their focus, dell and hp are dying, no need to invest

This also throws me.  How do you know what the heck MS is up to right now?  "Oh I haven't seen a game in a while so they must not be up to anything" seems to be the common tone amongst the impatient now.  Yet, WP users have already been through this.  With No-Do and with Mango, people hear something and jump to conclusions later only to find out the truth in a few weeks yet no one really reconciles the stuff said the weeks prior. 

Why is it good for Microsoft to get involved by investing in Dell? After Dell goes private Dell will have the same flexibility whether Microsoft invests or not.

We don't know what Microsoft is up to right now. If Microsoft had game developers coming they would tell the world. See Gameloft as an example. Based on what Paul said game developers have a tough time getting games Xbox certified plus they have a tough time getting updates to existing games out. These are known issues that have been around for years. If Microsoft fixes things I will be the first to say they addressed issues. I am not going anywhere anytime soon.

Microsoft had game developers coming they would tell the world.

With a new Xbox comming out it could be that they're working to reinvent the whole Xbox service. Perhaps they want to announce all the changes and additions at once to maximize the impact.
 
I know it is doubtful but perhaps they're working on more connectivity between Xbox for WP and the console. The whole Xbox for Windows Phone team could be merged with the other Xbox teams. This means a more proffesional Xbox service on Windows Phone. This could be the reason why we havent seen a new release in a while.
 
It could also be that from now on we will see less Xbox branded games but only higher quality games. I personally feel that Xbox for Windows Phone devalues the Xbox brand. If they can make it more exclusive and more connected to the console then they might get the likes of Bethesda and Epic Games to bring games to WP.

You know, I happen to believe this is true. Greater integration would be awesome. Reinvention of the current Xbox system awesome. More high quality games equally awesome. You sir are an optimist and I hope what you say comes true in a timely manner.

Because obviously Microsoft isn't a large company made up of 100,000 individuals capable. They also aren't able to do multiple stuff at once.

Not that I am an Apple fan by far, but I should point out that Microsoft invested $150 million into Apple when they were dying, and look at them now.

It strikes me that was low risk high reward and this is quite the opposite. More importantly it diverts focus from value adding activities in existing products.

I fail to see how investing in Dell is going to divert any focus from any of their current activities. This isn't an instance where they only have so much capital to do one or the other. Microsoft is quite capable of doing many different things at once.

What gives you the impression that Dell is dying?
they're doing pretty well.
I would say better than other PC manufacturers!

If Microsoft can influence Dell with their Signature Series and get rid of all that crapware that would be a milestone.

Exactly correct.  Dell builds some decent computers.  I have had two of their laptops, and both have served me well.  Its the amount of junk they put on there which is the major issue which prevents me from considering them for at third.  

Stop buying Dimensions and Inspirons then. The business lines don't contain a lot of junkware, and the XPS lines contain none at all.

I've really liked my DVP, but that was before Nokia joined the WP party. There's no reason for me to go back...

I think this is a deal amongst friends mostly.  I wouldn't expect much from the investment other than allowing Dell to re-invent itself while selling Windows boxes, especially to the enterprise where they do really well.

This is exactly right. When Microsoft invested in Apple, they didn't suddenly shutdown the Mac line (as much as I would have liked them too, lol). They made an investment to keep competition and the tech industry alive. This is a good will gesture by a company that's often, and inappropriately, vilified by the public.

My DVP has been extremely reliable. This would give Microsoft a manufacturing arm which may be their purpose. It would help foster producing products in house. Plus I would love an Alienware WIndows Phone. Total over the top spec wise.

Finally, someone talking with sense! An Alienware phone would be epic....could this be the windows phone ms is working on???

Dell needs better designs of the models, people are like wow when they see apple and Acer and when they see dell they are like oh, ok......that looks like 90's computer

Dell has never made a "gorgeous system" unless you are dazzled by the smoke puffing out of the vents.  Every Dell PC ever has been a piece of crap.
 
Every.  Single.  One.

Lol...right. Their XPS and Alienware lines are excellent. I imagine you are a Apple fanboy spewing false info like that.

I imagine he only paid attention to their horrors until very recently and he may not be aware that alienware is Dell...tbh I was never that impressed by Dell either and consider XPS to be an awakening of sorts, like HP with their Spectre & Envy lines =)

I'll agree that a couple years back their XPS line was dull. Current Gen XPS though is very nice. To many people compare a $399 PC against a $1199 iMac. Not a fair comp by any stretch...

After an initial stumble with some minor issues, my Dell VP was a solid device with zero issues (But I can't speak for any other Dell products, as I never owned one).
HOWEVER, where Dell pisses me off to no end is the absolute cut off of support for the Dell VP.  Let's review this: This phone is NOT sold via At&t or Tmobile... but the 7.8 updates are to be distributed through the carriers, WHO DON'T RECOGNIZE THE DELL VP.  Call the carrier, they say to call Dell.  Talk to Dell, they say they have no further plans to support the Dell VP and to go talk to the carrier.  What a bunch of f******* a*******s.  That last update that came out for WP7, my Dell VP was left out.
Now, I've upgraded to WP8 and what not, so basically my Dell VP is now just an alarm clock that can surf the web and run WP7 apps... but it would still be nice to be able to get the new upgrade.  I guess I could hack it, but I would really love to see MS step up for Dell VP owners and provide some support for them since Dell just s*** all over them.

I still use my Dell Venue Pro.  I am not eligible for an upgrade until May or June.  The sad thing is, I have come to the realization that I will never see an upgrade past the 7720.  No Tango, no 7.8.  I still have the keyboard bug.  That drives me crazy because that even affects the physical keyboard.  Solid phone, GREAT form factor, but Dell customer service sucks @--. 
If Microsoft is investing in Dell it is for one reason and one reason only: to make sure Linux doesn't get on these Dell computers.

Yep. As soon as I saw that Dell was trying to go private a few weeks ago, I knew MS was going to either buy their manufacturing arm or the company as a whole. They've always wanted to have an end to end solution, but Anti-Trust has always gotten in the way of that.
 
The OEMs are barely making profit these days, especially in comparison with past profits, and the future is only pointing to slimmer margins. Dell is going to strike first to be bought out by the only partner who could reasonably buy them out.
 
Over the last 10 years under that DoJ agreement they allowed Apple and Google to do things that they were prohibited from doing such as integrating services like iTunes, Google search, Maps, and a ton of other services without protesting so that when the agreement expired and they did the same, no one could raise an objection.
 
MS needs a hardware division that would include the ability to manufacture desktops, laptops, tablets, and phones. There are only 3 manufacturers that could even come close to fitting this bill; Dell, Lenovo; and HP. Lenovo would never happen due to the Chinese government. HP is a bloated, hot manufacturing mess that would take alot of restructuring as well as be extremely expensive. Dell is the right size, has a decent reputation in the enterprise, and with some restructuring, would make sense for an acquisition.
 
In the end you'll have an Apple model of Hardware and Software synergy running Windows, with the vast access to corporations. Its going to be an interesting year.

I have to say this could be microsofts biggest gamble, It is either a big caliber shoot on its own foot. Distrust from other oems, saturated pc market, who knows what lies ahead?
On the other hand it would allow microsoft to acquire a great deal of manufacturing techniques, invest on appliances such as server sollutions with preinstalled microsoft virtualization solutions and so forth.
It would give proper grounds for microsoft to compete with linux on the server market which is much more competitive.

I like the possible outcomes, I think microsoft could bring a great deal of opportunities for Dell. They are in need of better  management and investment on innovation.
 
 
 

A force to be reckoned! Dell for business and qwerty keyboard phones and Nokia for camera and navigation.

Love my Nokia 920, but my old Dell Venue Pro was solid. It had one glaring issue - the camera sucked!! Outside of this really liked the design, build, and screen. Would be a fan of Dell getting back into the smartphone game to take on RIM.

My DVP was a delight apart from the camera. Dell can come out with some serious hardware but no serious support if Dell decides to release another beast, then I'll give it a thought if they'd give it full support.

True...how that camera made it past quality control is beyond me. That phone would have been excellent with a decent camera

You can hardly get Microsoft themselves to get all their divisions to properly support WP so how could they convince a company that has already sworn off the smartphone market? Best let them do what they do best, pc's.

Have you ever owned a Alienware laptop ? Battery was less than 45 min...and was like 10 pounds. I can see an Alienware phone, 2 hours standby and weights in at 3 pounds....but, it performs awsome.
 
Hehe

Madness. The great great depression is coming and this is not a good move when the bubble bursts.

3billion is only about 10% of current value of DELL. What is MSFT going to achieve with that?

Alienware phone anyone? Imagine a phone with a dedicated graphics card!!! Only issue is there would be LED lights all over the device that would make the battery life last a couple hours max. But seriously, Dell could be the way to make a great hardware part of Microsoft.

You guys have great ideas ... I've been wondering how good real mobile gaming could be since I heard about that Xbox tablet if it comes close to PC gaming that would be amazing and I see dell being a big help with that if they can get it out with a version of the Elder Scrolls Online that would be epic and WoW if ur into that

I hope this deal wont work out and hence save MSFT. Skype or Barnes&Nobles have not shown any good results so far. So is the case with Yammer. They indeed wrote of 6bn loss from aquiring another company just in the previous quarter!!!