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Dell mulls going private after losing bid for storage company 3Par

Dell executives are considering taking the personal computer manufacturer private after losing a bidding war with Hewlett-Packard over storage provider 3Par, its chief financial officer said in an interview with CNNMoney.com.

Dell has been trying to rebrand itself as an enterprise solutions provider — a provider of enterprise technology like servers and cloud computing — in recent years, Dell CFO Brian Gladden said in the interview. Enterprise solutions, like providing online video and cloud computing, has become a $17 billion business for Dell.

Taking the company private is an option that’s kicked around a lot over at Dell’s Round Rock, Tex.-based campus. If the company weren’t in the middle of re-branding itself to work more for enterprise customers, it would be a much more viable option, Gladden said. But because the PC manufacturer is in the middle of changing its focus, it’s probably not an option for the immediate future.

By acquiring 3Par and its data storage capabilities, Dell would have been able to make a stronger push as a cloud provider and bring the cost of providing cloud computing down. But instead, Dell withdrew its $2 billion offer for the 3Par in September, ceding the company to HP. The bidding war happened over several weeks, with HP making the final acquisition for $2.4 billion. Dell was caught by surprise by just how much HP was willing to pay for 3Par, Gladden said.

That doesn’t mean Dell is throwing in the towel in the cloud computing marketplace. The PC giant picked up Boomi, a provider of web-based software services, earlier this week.

Around half of Dell’s revenue comes from personal computer sales now — and 80 percent of that comes from enterprise customers. That market is worth around $6 billion, Gladden said. But at the same time, Dell wasn’t planning on taking on companies like HP in the retail sector, he said.

Dell’s revenue grew 22 percent in its most recent quarter when compared to the same quarter one year ago — from $12.8 billion to $15.5 billion. Its services component, which includes enterprise solutions, grew 35 percent to $2.9 billion last quarter when compared to $2.1 billion the same quarter a year earlier. Its net income grew 16 percent to $886 million, compared to $762 million in the same quarter a year earlier.

Dell reports its earnings for the third quarter this year in around two weeks.

[Photo: Pink Sherbert Photography]

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