Michael Dell: Going back to private has been ‘awesome’
The IPO has become the Bar Mitzvah of start-ups, but in Michael Dell ‘s world it was time to tone down the partying. “Everything that you do as a public company, you think … how is this going to impact the quarter,” Dell told audiences at Future in Review (FiRe) Wednesday morning. “That’s not altogether bad, but taken to the extreme it can be quite bad.”
It’s also the reason, Dell explained at FiRe, that he took his company from private to public and then back again. At Dell (the company), it was time for a change in focus and strategy — a change that would have required longer-term thinking than just quarterly profits. The short-term perspective of shareholders was holding them back.
“If you step back and look at our society today, I think there is a plague of short term thinking,” Dell said Wednesday.
“The obsession with the near-term has dangerous implications.”
Dell has faced no shortage of criticism for taking that route. How does that transition feel personally? “It feels awesome,” Dell told his interviewer and FiRe Chair Mark Anderson.
“I love this freedom of being a private company.”
It’s a freedom that Dell says will allow them to focus on growing the business, investing in R&D and spending money in the short term to secure new customers, which he believes will lead to longer-term profit.
Their new focus will be broad: They’re increasing their strength in networks, servers and especially analytics, business intelligence and security. And they’re not abandoning the PC. “That part of our business is actually seeing the fastest growth it’s seen since 2006,” Dell said.
They’re also shifting their customer target, from large 100,000 person firms to more medium-sized firms, who, he says, have simpler, more universal needs that are easier to develop and more-often implemented. For their part, Dell can usually turn those products around and resell them to larger firms later.
In all cases, that focus on security he mentioned is essential. It’s also, at Dell, backed by a spy-like department that keeps dossiers on all the “big guys.” “We see attacks with no malware. And they’re getting in with no malware,” he said. “The changing nature of these attacks is significant and requires a constant vigilance.”
So, when all is said and done, would he recommend the public-private reversion to others? “I’m not going to say this is for every company,” he said, but there are trends that point to more love for private companies. These days, private companies are staying private longer and, he says he’s not alone in thinking about moving back into that world.
“I’ve had more than 10 public company CEOs contact me in the last year about doing this.”
“I’m sure we’ll see some others.”