Michael Dell: IBM deal a dud

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Rush to judgement ...

based on a false premise.

"When was the last time you saw a successful acquisition or merger in the computer industry? It hasn't happened in a long, long time...I don't see this one as being all that different."

The implication here is that the HP/Compaq merger was 'unsuccessful'. I am simply not quite sure that I would agree with that assertion at this point in time. I rather think that IBM wants to unload the Intel based PC business because they have bigger fish to fry. Whoever inherits that business will be buying not only whatever meager marketshare IBM currently has, but also technology and tools. Those assets might just make Lenovo a more successful competitor against Dell.

Meanwhile IBM will be freed up to pursue their PowerPC agenda. There is plenty of gossip that IBM has their eye on aquiring Apple. I am not sure if that talk has any basis in fact, but it would be interesting to see something like that happen, because it would mean that IBM would control both the PowerPC processor and the PowerPC based Mac platform. They would also gain a wealth of desktop IP that they could (and likely would) funnel into Linux that would be immune to any IP claims from MS, creating a top notch desktop OS that would scale from the handheld to the mainframe and beyond.

While some mergers turn out to be obvious duds, some have been very successful. Michael Dell has every right to have his opinion about this potential merger, but when he paints all tech mergers as being generically without merit, he gives himself away. He may well be worried about the effects of this merger, but i doubt if his concern has anything to do with its prospects for success. There is no doubt in my mind that Dell is facing stiffer competition from HP/Compaq than they were when both were seperate aneomic players in the PC market. And I suspect that he fears this new combination will mean trouble for a currently very successful Dell in the future.

Posted by: George Mitchell   Posted on: 12/07/04 You are currently: a Guest | Members login | Terms of Use

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