The Slow Road To Hell For Michael Dell

clip_image001      Hear no evil.

The PC industry is in a free fall and none of the big PC guys know what to do about it.  Microsoft put all of its marbles behind Windows 8 and when that operating system (and the ill fated Surface) blew up in flames, Steve Ballmer did what companies do when they have no Plan B – massively re-organize the company.  This gambit may keep stockholders at bay for a couple of quarters but in the end, Microsoft is toast and likely Ballmer along with it.

(A good question is why the PC industry thought Windows 8 was  going to be its savior in 2012.  Other than Windows 3.1 and XP, has Microsoft ever released an OS that had any level of success with consumers or business users?  Windows 7 looked good because Vista was awful.  Take Vista away and Windows 7 was ho-hum.  Most of us smartphone/tablet users could have predicted the doggedness of Windows 8 as soon as Microsoft published its design goals.  But there is big money managed by dumb people in the PC world.  They don’t understand the model has changed).

Intel, more quietly, is blundering about trying to figure out what to do.  They have a wonderful microprocessor road-map that stretches out for nearly the next ten years.  But the target moved and the road-map is becoming an off-ramp to Death Valley.  Intel, at least, has a glimmer to what it has to do to make processors for mobile devices.  The Atom was a test shot.  Now we have to see if Intel can make something that leap frogs ARM and still makes money. If you are a betting person, the odds are pretty long here.

Then there are the PC manufacturers.  Leo Apotheker shot HP’s PC business in the head rather than try to save it.  Of all the foolish moves he made, that decision was his most egregious.  One of the first things Meg Whitman did after airing out Apotheker’s old office was to re-affirm that HP was indeed in the PC business and in a big way.

But still, she would have fought a very up hill battle had not Michael Dell decided to take his company private.  You get the sense the Michael was drinking the same potion that Leo was but wanted to make his move outside the scrutiny of Wall Street. Now the Dell company is in business purgatory.  Three parties are fighting to control it; manufacturing PCs doesn’t seem to be important to any of them, and customers are flocking away.  To where?  To HP.  Michael Dell made Meg Whitman sweet.

Michael Dell is a pretty cool guy.  He was a visionary who built a manufacturing model in a new way and changed how PCs were made.  He pushed IBM, Compaq and tens of small PC companies out of the business.   He sold the company and when it floundered, bought it back again and made it thrive.   Now he wants to get out of the PC business.  Maybe this would have been one of the most ingenious decisions he ever made but we will never know.  Dell’s innards are being eaten by HP (PCs) and IBM (services).  Michael Dell, Carl Ichan and (for a while) the Blackstone Group are fighting over a carcass.  Ichan does this stuff all the time.  But Michael Dell deserves better.

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