Dell executives are considering taking the personal computer manufacturer private after losing a bidding war with Hewlett-Packard over storage provider 3Par, its chief financial officer said in an interview with CNNMoney.com.
Dell has been trying to rebrand itself as an enterprise solutions provider a4‚¬a4 a provider of enterprise technology like servers and cloud computing a4‚¬a4 in recent years, Dell CFO Brian Gladden said in the interview. Enterprise solutions, like providing online video and cloud computing, has become a $17 billion business for Dell.
Taking the company private is an option that&'s kicked around a lot over at Dell&'s Round Rock, Tex.-based campus. If the company weren&'t in the middle of re-branding itself to work more for enterprise customers, it would be a much more viable option, Gladden said. But because the PC manufacturer is in the middle of changing its focus, it&'s probably not an option for the immediate future.
By acquiring 3Par and its data storage capabilities, Dell would have been able to make a stronger push as a cloud provider and bring the cost of providing cloud computing down.‚ But instead, Dell withdrew its $2 billion offer for the 3Par in September, ceding the company to HP. The bidding war happened over several weeks, with HP making the final acquisition for $2.4 billion. Dell was caught by surprise by just how much HP was willing to pay for 3Par, Gladden said.
That doesn&'t mean Dell is throwing in the towel in the cloud computing marketplace. The PC giant picked up Boomi, a provider of web-based software services, earlier this week.
Around half of Dell&'s revenue comes from personal computer sales now a4‚¬a4 and 80 percent of that comes from enterprise customers. That market is worth around $6 billion, Gladden said. But at the same time, Dell wasn&'t planning on taking on companies like HP in the retail sector, he said.
Dell&'s revenue grew 22 percent in its most recent quarter when compared to the same quarter one year ago a4‚¬a4 from $12.8 billion to $15.5 billion. Its services component, which includes enterprise solutions, grew 35 percent to $2.9 billion last quarter when compared to $2.1 billion the same quarter a year earlier. Its net income grew 16 percent to $886 million, compared to $762 million in the same quarter a year earlier.
Dell reports its earnings for the third quarter this year in around two weeks.
[Photo: Pink Sherbert Photography]
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Companies: 3Par, Dell
People: Brian Gladden
Companies: 3Par, Dell
People: Brian Gladden
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