Well by now everyone is well aware of the leveraged buyout of Dell Computer by a group led by founder and Chairman Michael Dell, along with a consortium of venture partners include Silver Lake Investors and Microsoft. I’ll leave the financial analysis and LBO breakdown to the quantitative numbers wonks out there. What I’m more interested in is what this means for the legions of law practice consumers of Dell computers and support services.

The Big Questions You’re Undoubtedly Wondering About:

1. Are you SOL in the wake of the privatization efforts that seem to be focused on turning off the public light of scrutiny on the remaking of Dell, a la IBM post-shedding its PC division to Lenovo, into an IBM-like service-focused profit machine?
2. What will happen to that shiny new Dell PowerEdge Server you just installed next month, next year, or three years from now?
3. Should we continue to purchase Dell computer products at all?

The answers to these three big questions is yet to be determined. The ink on the deal isn’t really dry yet – there are hurdles still to be jumped apparently. But presuming the deal is done, this is likely going to be a positive change for Dell product consumers. With the ability to avoid the criticism of shareholders, the company can clean house any way it sees fit. That is likely to lead to an improvement in the range of, and quality of services. After all, one of the prime motivators behind this acquisition is the ability to pull down a curtain so we don’t have to see all the dirty work that goes from shifting the company’s core emphasis from being a hardware purveyor into a powerhouse services shop. Getting services right is bound to be part of the equation.

Will Dell peddle its PC business, the same way IBM did? Perhaps. It IS a massive business unit, responsible for billions of dollars in sales every year, even in a shrinking PC market. Lenovo has made a significant success out of IBM’s former PC business, although admittedly under the lessened regulatory environment known as China.

Will we stop recommending Dell systems in favor of HP or Lenovo or Apple? No. Dell systems, particularly their servers, still offer a very sound value and are likely to continue to power our clients’ practices for years to come. If Dell does spin off the PC business, in all likelihood, it will translate to better service, continued low pricing and more product variety under the stewardship of a new owner whose focus isn’t diluted like Dell’s is now.

So . . . I think this is near term good news for small law practices who either recently acquired or were planning on purchasing Dell’s systems. And if you happen to have been a Dell shareholder, you just got yourself about a 37% premium on your share value – not a bad day’s work.

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