Dell blames 'uncertain adoption' of Windows 8 for some of its financial woes

Paints a gloomy picture of the PC business, emphasizes Windows 8 troubles and a decrease in Windows 7 sales

By , Computerworld |  Windows

Still, the onus on Windows 8 was notable coming from Dell, a long-time partner of Microsoft. But it jibes with other analysis and data, ranging from allegations that Windows 8 failed to deliver the sales "pop" that new editions traditionally provide, to a lethargic usage increase that has been slower than that of Windows Vista, the 2007 edition that has been labeled one of Microsoft's rare flops.

Dell remains a major PC maker -- the world's third largest, according to IDC, with a 10.6% share of the market in 2012's fourth quarter. And its personal computer and associated products and services, what the proxy dubbed the "end-user computing" (EUC) business, account for 65% of company revenue. Michael Dell, however, wants to push a strategy to de-emphasize the EUC business and transition to a model reliant on higher-margin services to enterprises.

Michael Dell and his investors argued that the business model switch would not be possible if the company remained public and had to face the wrath and impatience of shareholders each quarter.

Of course, it was in the company's interest to paint the worst-possible picture of its troubles to convince shareholders to accept the takeover plan proposed by Michael Dell, Silver Lake, Microsoft and others.

The proxy also detailed how Microsoft became an investor in Michael Dell's privatization offer.

On Dec. 10, 2012, Silver Lake asked for permission to discuss the transaction with Microsoft, and later in the day said it would bow out unless it was allowed to talk to the Redmond, Wash. developer about investing in the buyout. The next day, Silver Lake was given approval.

Microsoft signed a confidentiality agreement on Dec. 23, 2012. By Jan. 15, 2013, Microsoft's board had given the go-ahead to invest $2 billion.

Silver Lake and Microsoft have history. In 2011, the private equity firm brokered the sale of Skype to Microsoft for $8.5 billion. Silver Lake had acquired a 39% stake in the video calling and Internet chat company from eBay two years earlier for about $1 billion, and tripled its money when it sold to Microsoft.

Also in 2011, Silver Lake made an ultimately failed bid for Yahoo that reportedly included Microsoft as one of several partners.


Originally published on Computerworld |  Click here to read the original story.
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