Since Michael Dell took the CEO helm back in 2007, his company has made a significant shift in moving away from the staid and low-margin PC maker mentality to an IT services mentality; specifically cloud computing and mobility.
While I haven’t agreed with the majority of their acquisitions, execution, and maneuvering into this space, I do sense a great opportunity for them.
This great opportunity is in the form of Extreme Networks.
I feel that the key piece they are missing in their portfolio is networking, which will tie both aspects of their new mentality into a nice holistic package.
Mr. Dell stated during his June 29th keynote that: “Our focus now is on enterprise solutions that provide efficiency and flexibility.” Couple that message with their plans to
- Data Management
- IT Services within Cloud Computing
- Revamping their user computing model
It is readily apparent to me that they need the underlying communication framework and network technologies to make their vision a reality.
Granted, Dell has existing partnerships with Brocade and Juniper that can and will assist them in this regard, but why not bring this key piece of the information
technology equation in-house with a smart and timely acquisition?
Extreme is prime for the taking:
- $265M market cap
- Vastly under-valued
- Management turnover
- Investor dissatisfaction
- 52 week range of $2.51 – $4.25
Mr. Dell, an offer of ~6$/share will fill out your portfolio and vision nicely, as well as make speculating investors such as myself very happy.
By the end of this year, I expect some action regarding this.