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Why Microsoft wants a piece of Dell

As Dell explores going private, Microsoft is an interested investor. It needs computer companies that focus on Windows-powered machines.

A group of investors wants to take Dell private. Michael Dell, the computer company's founder and chief executive, has been in talks with banks, a private equity firm and Microsoft.

"You could say Microsoft is doing this for selfish reasons," say James McQuivey, an analyst with Forrester Research. He says Microsoft wants to survive.

"Microsoft cares about Dell because they need to have enough companies putting enough effort into making Windows-based devices."

And by investing in Dell, Microsoft could encourage that. Jayson Noland, an IT analyst with Baird, says this is Microsoft acknowledging the tech landscape has changed.

"We've seen so much innovation in consumer electronics -- specifically smart phones and tablets -- and the PC hasn't kept up."

Forrester's James McQuivey says Microsoft has begun to branch out. It used to be just a software company.

"There is a lot of risk in Microsoft putting its hand on the hardware business." But, he says, there'd be a lot more risk if it didn't.

 

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.
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