Microsoft has supported the $24bn buyout, led by Michael Dell, as it seeks to shore up support for Windows and compete against Google’s Android.
According to a report in Reuters, the move marks a departure from the decades-old, software-centric philosophy that helped it dominate the computing world. It is not clear how much sway Microsoft will have on Dell’s strategy, but the two have been close partners for 25 years, and will likely build on that.
There is a risk that this approach shows biased that will upset other hardware makers. However, Microsoft made extra efforts not to alienate its other PC makers, talking to them before inking the deal, said sources familiar with Microsoft’s relations with its partners, and holding off from an ownership stake.
Even so, PC maker Hewlett-Packard (HP) issued a statement critical of the deal.
“It doesn’t mean it’s a bad move, but it’s definitely defensive. Microsoft is realising it must be much more engaged in the hardware business than it used to be’ it needs to be making bets and forming relationships,” said Andrew Bartels, an analyst at Forrester Research told Reuters.
Microsoft, advised by Lazard Ltd, declined to comment on the terms of the Dell loan, or what exactly it gets in return, but made it clear it would look for “opportunities to support” companies that buy into Windows, in whatever form. That suggests this may not be its last third-party investment.
Chief executive Steve Ballmer made it clear last year that he sees Microsoft as a “devices and services” company with an explicit interest in hardware, whoever it is made by.
