Dell is in the process of buying back its shares to become a privately held companyonce again. Microsoft helped facilitate Dell's $24.4 billion deal, with a $2 billion investment that makes the two tech giants partners of sorts. This is either the last gasp of desperation for PCs as we know it, or a sign that Dell and Microsoft still have innovative tricks up their proverbial sleeves.
We’ve been hearing for years about the "post-PC" era. Bill Gates originally coined the term in 1999 in an op-ed for Newsweek. Since Gates first declared the beginning of the "post-PC" era, PC sales have tripled.
However, Gates had the right idea—he was just ahead of his time. Apple's launch of the iPad and the subsequent tablet revolution has brought the term "post-PC” back in vogue. Tablet sales are brisk, and PC sales are dwindling.
At face value, the "post-PC" trend doesn’t bode well for either Dell or Microsoft. Despite CEO Michael Dell’s claim that Dell is "not really a PC company", the fact remains that Dell and PCs are synonymous in the eyes of most businesses and consumers. Plus, the operating system predominantly associated with PCs is Microsoft Windows.
Does that mean that Dell and Microsoft are doomed to follow BlackBerry (formerly RIM) to rapidly eroding relevance? Not necessarily. Taking Dell private and teaming up with Microsoft gives both companies some creative options.
Dell and Microsoft can focus on core PC products in an effort to invigorate sales, or shift their focus to cloud and mobile tools. They can also choose whether to target businesses, consumers, or both. Why not focus on tablets?
The tablet, after all, is not an indicator of a "post-PC" era because a tablet is not "post-PC". A tablet is simply an evolution of what we define as a personal computer. With Windows 8 tablets, whatever line may have existed between a PC and a tablet blurs right out of existence. A Windows 8 Pro tablet looks and acts like a desktop PC while docked at your desk, yet retains the versatility of a tablet when you choose to go mobile. The tablet is the PC.
With the launch of its Surface tablets, Microsoft ventured into new territory and stepped a little on the toes of its equipment-manufacturing partners. While the engineering and quality of Redmond's tablets has been almost universally praised, they are priced higher than expected, and sales so far appear to be disappointing.
I asked Onuora Amobi, editor of Windows8Update.com, for his thoughts on what customers can expect from the Dell-Microsoft partnership. "What the deal should mean for users of both companies products is higher levels of innovation, lower prices, sleeker and sexier looking products...Microsoft and Dell should focus on making signature Surface-type products that are well made and get the attention of both consumers and the enterprise."
Other industry observers disagree that the two companies should team up on something like the Surface. Nevertheless, Dell has tried a variety of tablet concepts, but none have been as compelling or innovative as the Microsoft Surface tablets. With access to Dell’s intellectual property, supply chain, and distribution channels, new models could go from concept to market much faster, and Dell with Microsoft could bring Surface tablets to the masses at a more affordable price.
We'll have to wait until the new private Dell is official, and even then only time will tell, but the Dell-Microsoft union has a lot of potential to help both companies reinvent themselves.