#Dell is going public in a relatively strong position, says #Craig Lowery, a former Dell executive who is now research director at industry analysis firm Gartner. But there’s a good chance it won’t be in such a strong position in the future as cloud computing eats into its data center business.
So why return to the public market now? During a conference call, Dell CFO Tom Sweet said the deal will simplify the company’s ownership structure and “enable #Dell Technologies to grow into an even stronger company.”
The EMC deal helped Dell withstand slowing sales of personal computers. In its fiscal year ended February 2, revenue in Dell’s Client Solutions Group was slightly less than three years earlier. But revenue in the Infrastructure Solutions Group, which sells to businesses, more than doubled, as did Dell’s overall operating-segment income.
Since going private, Dell has invested heavily in expanding its business selling hardware, software, and services for data centers. In 2016, it paid a record $67 billion for storage hardware giant EMC, including EMC’s stakes in business software companies VMware and Pivotal, which will remain independent. In filings with the Securities and Exchange Commission, Dell now describes itself as “a strategically aligned family of businesses.” One thing hasn’t changed: Founder and CEO Michael Dell owns a controlling stake in the company.
Dell Technologies is going public again, five years after going private to transform itself amid slowing personal computer sales. Dell has certainly changed in those years, but it needs to change even more if it doesn’t want to find itself back in the same position.