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IT pros hope Dell going private will improve products, integration

Beth Pariseau, Senior News Writer

Dell customers hope better enterprise product roadmaps, integration and customer service improvements result from the company going private this week.

Dell Inc. has acquired a dozen companies in the last three years, and those close to the company say overlaps between products have led to confusion for customers and channel partners.

For example, Dell has acquired several storage and data backup companies – Compellent, EqualLogic, Quest Software Inc, and AppAssure – while retaining ties with Commvault as a data backup partner. Another example is Dell’s tangled messaging around

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cloud computing.

All the while, Dell has struggled to reinvent itself from a consumer and SMB-focused hardware company to an enterprise-focused software business. CEO Michael Dell said in an internal memo to employees that going private should help with the company’s transformation.

“It’s a redoubling of their enterprise focus, and a way to meet their targets in enterprise software and storage,” said Alex Rodriguez, vice president of systems engineering and product development for Expedient Communications, a managed hosting provider based in Cleveland which uses Dell servers, storage and software.

Expedient is not using software from the Quest portfolio yet, but Rodriguez said he’s particularly interested to see how that software will be handled as the company goes private.

“I want to see how they marry it to their hardware platforms, allowing more insights about what’s truly happening in hardware,” Rodriguez said.

Other customers remain guarded.

“My gut feeling is that the vendors we’ve dealt with that are private seem to be more responsive and a lot more flexible,” said Michael Biedermann, systems analyst for the University of New Mexico hospital system, which uses Dell servers and storage. “I don’t know what it means, though, from a pricing and support perspective.”

Analysts don’t see the move having a big impact on customers, either positively or negatively.

“Dell needs to revamp their internal structure and modernize their channel and sales model,” said Carl Brooks, analyst with 451 Research based in Boston, Mass. “While they’re public, they have to do all that out in the open and take the slings and arrows from Wall Street -- if they go private, they can take that process off the stage.”

Customers may be optimistic or neutral on the effects of the deal, but that hasn’t stopped competitors such as Hewlett-Packard Co. from trying to make hay with it.

“Leveraged buyouts tend to leave existing customers and innovation at the curb,” the company said in a statement.

The $24.4 billion deal is the largest leveraged buyout of an IT company in history, eclipsing SunGard’s $11.3 billion deal in 2005, and is one of the largest of any business.

Beth Pariseau is a senior news writer for SearchCloudComputing.com and SearchServerVirtualization.com. Write to her at bpariseau@techtarget.com or follow @PariseauTT on Twitter.


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