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HP Will Prey on Disgruntled Customers in Wake of Dell Buyout

On Tuesday after Dell announced that it would be acquired by CEO Michael Dell and global technology investment firm Silver Lake, HP released a short statement saying that the rival PC maker has a very tough road ahead, especially when it comes to retaining customers.

HP would seemingly know all about the "tough road" given all the uncertainty surrounding the company in 2011 after it discontinued selling webOS products and revealed plans to possibly spin off its Personal Systems Group. But HP Meg Whitman said that "a separation would not create incremental shareholder return or customer value". Thus the company went through an "organizational realignment" to improve performance and drive profitable growth across the entire HP portfolio.

Now the struggling PC maker is taking shots at another struggling PC maker that's gone private in a $24.4 billion leveraged buyout deal so that it can restructure and shift its focus to the enterprise sector. Dell may even be able to find its mobile footing so that it can better compete in a growing smartphone and tablet market.

"The company faces an extended period of uncertainty and transition that will not be good for its customers," HP stated. "And with a significant debt load, Dell's ability to invest in new products and services will be extremely limited. Leveraged buyouts tend to leave existing customers and innovation at the curb. We believe Dell's customers will now be eager to explore alternatives, and HP plans to take full advantage of that opportunity."

Ouch. Dell founder and CEO Michael Dell, who invested his own funds and shares into the buyout, sees the change a little differently.

"I believe this transaction will open an exciting new chapter for Dell, our customers and team members," he said. "We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise. Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision."

On Tuesday Dell announced that stockholders will receive $13.65 in cash for each share of Dell common stock they hold, in a transaction valued at approximately $24.4 billion. The buyers will acquire for cash all of the outstanding shares of Dell not held by Michael Dell and "certain other members of management".

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  • susyque747
    Nice to see Dell go back to private, bad to see Mr. Dell take money from Satan, aka Microsoft.
    Reply
  • Why would DELL customers be disgruntled?
    Reply
  • antilycus
    to save on their profits, HP used inferior parts in business class equipment. I've had custoemrs loose hundreds of thousands of dollars because they use cheap/eco Seagate drives, horrible raid controllers and borderline stupid bios'. STAY AWAY FROM HP. Dell is STILl the better choice and custom build your own if you can deal with warranty issues (if they even come up). I've built over 75 servers and workstations for customers in 3 years (including businesses as they are my clients) and never once have I had a warranty issue. I uses ASUS Motherboards and Wester Digital drives. PUrchase good equipiment, not cheap equipment.
    Reply
  • jacobdrj
    antilycusto save on their profits, HP used inferior parts in business class equipment. I've had custoemrs loose hundreds of thousands of dollars because they use cheap/eco Seagate drives, horrible raid controllers and borderline stupid bios'. STAY AWAY FROM HP. Dell is STILl the better choice and custom build your own if you can deal with warranty issues (if they even come up). I've built over 75 servers and workstations for customers in 3 years (including businesses as they are my clients) and never once have I had a warranty issue. I uses ASUS Motherboards and Wester Digital drives. PUrchase good equipiment, not cheap equipment.Even WD drives have quality problems these days, at least since the floods. There are not 'good' hard drives in the consumer space that can be recommended to my clients in good faith...
    Reply
  • g-unit1111
    I need a new laptop and I hate Dell - will HP give me a deal on one? :D
    Reply
  • RealBeast
    The total lack of HP printer drivers for Windows 7, talk about a complete absence of customer service.
    Reply
  • hakesterman
    The PC market is so slow right now that i don't think HP is going to get many new customers. Dell makes great laptops, i have had at least 3 in my life time and never had an issue with them, they run alot cooler than HP laptops and their better built.
    Reply
  • jacobdrj
    hakestermanThe PC market is so slow right now that i don't think HP is going to get many new customers. Dell makes great laptops, i have had at least 3 in my life time and never had an issue with them, they run alot cooler than HP laptops and their better built.Their Alienware stuff has serious problems. A customer had to RMA their 17" with SLI 3 times for hardware/driver issues. Ultimately they replaced it (finally) but for a 2000 dollar laptop, that was unacceptable.

    Dell in general... well, I have a consumer grade 11" laptop with an i3. It is ok. Does the job. Wish they had cheaper batteries (their 1st one died in a couple months, but that might just be a glitch). I just feel like their bios are too proprietary...

    Wish we had more options. ASUS seems to be the only vendor I can trust these days...
    Reply
  • blazorthon
    RealBeastThe total lack of HP printer drivers for Windows 7, talk about a complete absence of customer service.
    My somewhat new HP printer has no issues with Windows 7. Are you referring specifically to older printers?
    Reply
  • blazorthon
    jacobdrjEven WD drives have quality problems these days, at least since the floods. There are not 'good' hard drives in the consumer space that can be recommended to my clients in good faith...
    Although expensive, it's my understanding that WD's VelociRaptor drives are still very reliable. I also haven't had issues with any Caviar Reds, granted they aren't very old yet.
    Reply