Microsoft Interested in Deeper Control Over Dell in Exchange for Help with Buyout

Not too long ago we covered news about Microsoft reportedly throwing some cash into the Dell privatization effort, roughly $1-3 billion in fact. As expected, this sparked some additional rumors that Microsoft would be using Dell to push its hardware plans ahead and even to help steer the company away from Linux and Android efforts going forward.

Now it seems that the final buyout agreement could come to a close very soon, and Microsoft is in fact helping Dell out but is demanding a say in Dell’s future roadmap and key decisions in return. Wall Street Journal reports that the final details of the arrangement are still being debated, but Microsoft isn’t backing down on that key point.

Not surprisingly, Dell isnt’ exactly thrilled about the idea of its software provider having a deeper hand in their affairs. So will it go through? Its hard to say for sure. If Michael Dell really wants this to happen and isn’t backing down, I’d say it is certainly a strong possibility.

It begs another question though, why is Microsoft interested in Dell?

The answer is reasonably obvious in my opinion at least: control.

The PC market is starting to slide downward and many of Microsoft’s key partners are now beginning to look at alternative operating systems besides Windows. Lenovo and HP are the latest partners to join the Chrome OS partnership list.

While cloud computing isn’t for everyone, today’s high-speed Internet world makes it much more plausible then ever before. Ubuntu is also gaining traction, with companies like Dell offering versions of their hardware pre-installed with the popular Linux flavor. Even Mac OS is on the rise. And then there are the big mobile computer operating systems like Android and iOS.

By gaining a deeper hand in their partners business affairs, they can effectively stomp out growth from alternative desktop and mobile operating systems. While this isn’t probably the best long-term strategy, this could help buy Microsoft time to win consumers and other companies on new operating system efforts like Windows 8.

Ultimately though, buying stake in partners like Dell could prove to further alienate some of their other partners who feel that Microsoft is getting to involved and controlled in hardware.

Do I personally think Microsoft is down and out? Not at all. This is a tough period of time for the company, but they are still doing well enough fiscally and they still have deep pockets and heavy resources. Right now Microsoft just hasn’t found the “right direction” forward. I believe Windows 8 and Windows Phone 8 are part of the big plan in helping Microsoft evolve forward– now they just need to find a way to convince customers, businesses and investors.

What do you think, is Microsoft just having a temporary tough time? Are they in any serious danger when it comes to dominance in the computing world? Share your thoughts below.

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