Preston Gralla

The Dell deal: Microsoft comes out a big winner

February 05, 2013 12:43 PM EST

Microsoft is one of the biggest winners in the deal to take Dell private. It means the continuance of a healthy Windows ecosystem, including for tablets. More important, it could ensure Microsoft's dominance in the enterprise, and lead to possible success in the cloud.

Microsoft will invest $2 billion as part of the $24.4 billion deal to take Dell private. As of yet, there are no details about what role Microsoft might play in the company. Surprisingly, rather than take an equity position in Dell, Microsoft instead made a loan. Microsoft hasn't explained why. It had this to say in a statement:

"Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future. We're in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform."

Fortune reports that Microsoft made a loan rather than taking equity because:

"...the software giant was worried about other customers thinking that Microsoft (MSFT) had incentive to value one over another, so it chose not to take an equity position."

Still, Microsoft expects to get something in return for its $2 billion. One thing, of course, will be that Dell will continue to make Windows devices. Perhaps most important is for Dell to make Windows 8 tablets, because Microsoft lags so far behind there. Tablets are important for Microsoft not just for the consumer market, but the enterprise market as well. A Gartner report recently said that Macs will become as accepted in enterprises because of the success of iPads. One way to fend off that threat is for Microsoft to gain a healthy tablet market share.

Dell's future is likely more tied up with services and consulting than it is in hardware, following IBM's successful model. That bodes well for Microsoft, particularly in the cloud. Forrester Research analyst David Johnson had this to say last month about a potential Dell-Microsoft deal:

"Enterprise IT needs to have ways to build their own world-class private cloud infrastructures that are orders of magnitude easier to achieve, without having to put the pieces together in-house. In the face of VMware and others surrounding software-defined datacenters, converged infrastructures...will be critical. A Microsoft investment in Dell could really shake this up in short order."

The takeaway about Microsoft's investment? Microsoft is a big winner here. And $2 billion may sound like a lot of cash, but for cash-rich Microsoft it's a bargain.