Michael Dell is right. He's right that his company -- this time Dell Technologies (DELL) -- is once again being underestimated by Wall Street and by competitors.
And he loves it that way. The 23-year-old kid who brought Dell public back in 1988 was always knocked by many as nothing but an assembler. He trounced the averages during the period it went public, though -- I mean really crushed them, because he turned out to have the dominant PC company.
After talking to him yesterday, I am convinced that the same thing is about to happen to Dell Technologies. I don't think people realize that ever since he bought EMC -- and therefore VMWare, because of its 82% stake in that incredibly fast growing company -- Dell has become synonymous with computing power and is as ubiquitous as water. Four hundred and ninety nine of the Fortune 500 use Dell.
This company is getting huge multi-hundred million dollar contracts, as well as some half-billion dollar contracts at major enterprises -- especially the banks. And these are orders that we used to think about going primarily to IBM (IBM) . Sometimes I wonder if IBM bought Red Hat to keep up with Dell-VMWare. And as much as like the team who runs IBM -- unless Red Hat's Jim Whitehurst stays with a very big role -- I don't think that they can defeat this Dell juggernaut.
I like what Michael Dell did. He didn't think his company was getting its due. So he bought it back in 2013. I think that looking back, a lot of people think he stole the company -- but that's total nonsense. The reality is that at the time, right before Dell took it private, you couldn't give this one away. There just didn't seem much that could be done with a personal computer company in the day of the cloud's ascendance.
As a private company, Dell was capable of really gaming the landscape. He managed to snare another chronic loser, EMC, and put them together. And while there were clearly some synergies -- $1 billion worth -- skepticism remained thick when the deal closed.
I would say that people still don't understand what Dell does. It is becoming the hardware heart of the internet, with some software to make it all come together.
No one else has the suite Dell has. No one.
So, underestimate him, but remember it will be at your own cost -- and peril -- when you do.