Silver Lake

In two thousand and twelve, Wall Street abandoned Dell. The personal computer business was dying. Margins collapsed. Growth stalled. Investors fled. Michael Dell traded below book value. Silver Lake Partners looked at the same facts and saw something different. A world-class business at discount because investors were focused on the wrong metrics. Dell had recurring revenue from enterprise customers. Thousands of corporations running data centers on Dell hardware. These relationships were stable and profitable. Wall Street hated hardware as commodity. But Dell's enterprise business was not commodity. It was switching costs. Customers could not easily move infrastructure without massive operational disruptions. Silver Lake took Dell private for twenty-four billion dollars.