It looks like the pain has just begun for Michael Dell, the embattled founder of Dell Inc.
On Thursday, Dell's shareholders finally voted to let Dell and Silver Lake Management take the company private in a $24.9 billion leveraged buyout, ending seven months of tension between Dell and activist investor Carl Icahn.
Icahn fought hard to block the deal, forcing Dell to postpone scheduled votes on the privatization plan and change voting rules to tip the scales in his favor.
Icahn bowed out earlier this week, writing an open letter to shareholders. "We jokingly ask, 'What's the difference between Dell and a dictatorship?' The answer: Most functioning dictatorships only need to postpone the vote once to win," he wrote, pretty much summing up the tone of the last few months.
Back in February, Dell argued that the company needs the kind of painful changes that are best made far from the unforgiving eyes of shareholders. Now he has his wish: Dell will own about 75 percent of the company he founded, while Silver Lake, a private equity firm, will claim the rest.
"By winning the fight to take the company private, Dell gets to be the one who tries to take his company through that transition," says Bloomberg Businessweek's Joshua Brustein. "It's a dubious prize."
One reason it should be tough: The PC market is shrinking as consumers shift to smartphones and tablets, and foreign tech giants like Samsung have started crowding the playing field. Dell has retained its hold on the PC market, but only by slashing prices — which hasn't been great for the bottom line.
So what does Dell have planned for the company? People familiar with his strategy told The Wall Street Journal that he'll focus on three key areas, refashioning the company's identity much the way IBM did to great success:
One is security software, which corporations use to prevent unauthorized use of their computing networks or thefts of data. Another is tools to help companies take an analytical approach to business decisions, a software niche known by the term Big Data. The third area is a plan to offer "IT in a box," or all-in-one bundles of hardware and software that companies can cheaply and easily deploy. [The Wall Street Journal]
Dell has also said he plans to try to compete in the space for smartphones and tablets.
And what happens if he succeeds? Probably another round of pain, says Abram Brown at Forbes:
If successful, the new owners of Dell will likely return it to the public markets down the road and set off a fresh wave of outrage over how shareholders were paid to go away and missed out on the benefits of the turnaround. But, despite the arguments on both sides from Icahn and Dell, there is no crystal ball. [Forbes]