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Tech Report: Microsoft May Invest In Dell Buyout

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Microsoft Makes Major Announcement
LarryMagid01-228 Larry Magid
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SAN FRANCISCO (KCBS) — According to recent reports, Microsoft could invest up to $3 billion to help buyout computer maker Dell. Microsoft has been known for software development, but this latest news has some techies speculating that they are serious about getting into the hardware development as well.

The news comes just as Microsoft announced that its new Surface Pro will ship February 9th. If this investment in Dell does happen, it would be a minority share. Dell is probably worth closer to $30 billion. The fact is if the deal goes through, they would have a pretty significant interest in one of the many companies that makes Windows PCs.

Dell has been competing with Lenovo, ASUS, Hewlett Packard, along with many others that offer similar products. So I think Microsoft is looking at Apple and seeing their success and are trying to figure out how to get a piece of the hardware business.

But in the past, Microsoft has built its entire model around not competing. In the past, they have made the software and relied on other companies to make the hardware.

So this does leave a window open (no pun intended) for potential backlash against the company. In fact at the Consumer Electronics Show in Las Vegas, people spoke to me off the record and complained that Microsoft was possibly getting into the hardware side of things.

I interviewed Bill Gates many years ago where he admitted that Apple had an advantage over Microsoft, saying that they could control the hardware and the operating system, enabling them to make a better product.

With the Surface Pro, Microsoft could prove once and for all that when they have complete control, it can be a better product than a typical Windows PC. Whether or not they’ll be in complete control remains to be seen.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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