Going private unleashed Dell Inc.’s creativity and has given the company the freedom to transform itself, company founder Michael Dell says.
Dell made the remarks at a University of Texas even on Thursday as part of the Longhorn Startup Demo Day. The event allowed teams from UT’s Longhorn Startup Program to present their fledgling companies to a gathering of nearly 1,000 members of the startup and tech community.
Dell and his financial partner Silver Lake led the nearly $25 billion go-private transaction in 2013. Analysts have said the company appears to be succeeding in its move to remake itself into a stronger supplier of advanced information technology hardware, software and services for business customers.
Dell Inc. is the largest private employer in the Austin area, with about 13,000 employees in Central Texas and about 100,000 employees worldwide.
In response to a question from Bob Metcalfe, a UT professor of innovation, Dell said his company needed to go private because the public markets had become too prying for a company that was looking to reinvent itself.
“What I saw was that the public markets didn’t necessarily have the long-term focus that I had as the founder of the company,” Dell said. “And being private has given us the freedom and the flexibility to continue to evolve our business and focus on more longer-term outcomes.”
That means investing in research and development, building out new products and services, adding sales capacity and “really doing it in a way that thinks about the economics of that over a much longer period of time.”
The public markets today are awash in “short-term thinking run amok,” Dell said.
“You actually see this also in politics, you see it in education,” he said. “When everything’s going fantastic, it’s not a problem, but if you’re trying to evolve and change and do new things, you need to go invest in some new capabilities.”
But the move to take Dell Inc. private was also met with some opposition, led by billionaire investor Carl Icahn, who regularly assailed Dell in tweets and press releases.
Dell seemed to allude to the battle with Icahn, saying it was a “bit of a wrestling match to get it done.”
After Metcalfe read one of Icahn’s tweets, Dell responded: “Yeah, (Icahn is) a pretty colorful guy with words. But at the end of the day, he lost, so you know, that’s all that matters.”