Analyst: Dell Going Public Again Is Good News For The Channel


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Dell’s return to the public market is good news for everybody. That's according to Patrick Moorhead, an analyst at Moor Insights & Strategy based in Texas.

“I think the time is right for these guys.  They had a lot of changes that they needed to make and also the equity market, the stock market, has gone crazy over the last two years, so I think it’s a good time,” said Moorhead.

Dell made the announcement on Monday. Under the $21.7 billion deal, Dell will return to the public market, buying out its VMware tracking stock through a cash and share-swap deal.  VMware will remain an independent, publicly traded company in which Dell has a controlling stake. VMware will issue an $11 billion dividend, with $9 billion going to Dell.

“What this shows is that we have a company that used to be considered a legacy enterprise services provider who has now come full circle in a very similar way that I think people view companies like Microsoft now,” said Moorhead.

Moorhead said the channel should feel good about what’s to come.

“If I step back and I put myself in the shoes of a channel provider, first and foremost, I’d feel good because the big vacillations and the risks are going down. I think there is a possibility in the future that there could be a marriage between VMware and Dell that’s more official. Right now, they are just visiting each other. They’re not married and living together in the same home,” said Moorhead.  “I think, overall, this is good news for the channel.”

 

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