Cloud is at the center of a convergence trend that is impacting people across all of ICT. This convergence is breaking down the walls that separated the traditional silos of IT, networking, storage and security. But with this breaking down of the walls we also need to better understand the subtleties of each other’s domains in more details.
A famous urban legend is that Eskimos have many words for snow, as it makes sense to – if you spend your whole day in snow – to distinguish the subtle and not so subtle differences.
Similar in IT, where others simply refer to IT as IT, the people living in IT tend to distinguish between operations, development, support (helpdesk), testing, portfolio management, information and master data management, etc.
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Icahn Lashes Out at Dell Board & Dell Himself
After joining with Southeastern Asset Management in signing an open letter to Dell’s special board committee – which is wrestling with Michael Dell’s offer to pay $13.75 a share, 10 cents more a share, to change how the stockholders vote on his leverage buy-out offer is counted – telling the special committee he expected them to tell Michael Dell “no” – activist investor Carl Icahn wrote another open letter to Dell shareholders characterizing Michael Dell as a “whining” “sore loser” and major corporate “liability” and castigating the Dell board for “making a mockery of what little is left of corporate democracy at Dell.”
He tells them that “If my past record is any indication, I believe you will be happier and richer if you join me in voting against the Michael Dell/Silver Lake deal….It is time for Michael Dell and the Dell Board to go.”
Dell stock, which closed Monday, at $12.87, off seven cents from Friday, was suggestively rising after-hours to around $12.94 as the letter circulated.
The letter in its entirety reads:
Dear Fellow Dell Stockholders:
In their Merger Agreement, Michael Dell/Silver Lake agreed with the Dell Board that they would purchase Dell if, and only if, a majority of the outstanding shares held by unaffiliated stockholders voted in favor of the transaction. In that Merger Agreement, the Dell Board agreed with Michael Dell/Silver Lake that none of the current stockholders would be allowed to own shares in the newly formed company – they would be frozen out. Further, the Dell Board agreed, wrongly in my opinion, to let Michael Dell/Silver Lake purchase the stock at what I view is a very undervalued price.
Even though the Dell Board and Michael Dell/Silver Lake agreed that a majority of the outstanding stock held by unaffiliated stockholders would be required to approve the transaction, and even made that provision of the Merger Agreement non-waivable, this required vote has not been achieved. Reports have indicated, and it is clearly the case, that Michael Dell/Silver Lake did not have sufficient stockholder support at either the July 18 or July 24 meetings.
Instead of accepting defeat with dignity, Michael Dell, in his interview with The Wall Street Journal, complained that the Merger Agreement he negotiated is unfair. This is the very Merger Agreement that Michael Dell/Silver Lake agreed to, and ironically, Michael Dell, not the stockholders, initiated this proposed transaction. Is it Michael Dell’s alter ego who keeps whining about the unfairness of an agreement that he himself asked the Dell Board to accept?
I might be able to understand the actions of Michael Dell, who does not wish to lose a golden opportunity, but I cannot understand the actions of the Dell Board. The Dell Board approved a merger at what I believe to be a very undervalued price but they at least made it clear that an affirmative vote of a majority of the outstanding unaffiliated shares would be required to accept the Michael Dell/Silver Lake proposal, first at a meeting on July 18, and then again, on July 24. But reports indicate that Michael Dell/Silver Lake did not have the necessary stockholder support to approve their proposed transaction at either of the scheduled meetings. The stockholders have spoken. Additionally, millions of shares of Dell stock have been traded since the Dell Board signed the Merger Agreement which included the non-waivable stockholder approval requirement – a provision that Michael Dell now wishes to change. What about the stockholders that purchased and sold shares of Dell stock based on this provision? Why does the Dell Board continue this travesty? Why do they make a mockery of what little is left of corporate democracy at Dell?
In The Wall Street Journal interview, Michael Dell criticizes the fact that Icahn was not a stockholder when the process started. In effect, he seems to be saying that Icahn has no right to meddle with Michael Dell’s “super Dell” deal. I am also confused by Michael Dell’s statement that “after one of the most thorough processes in history the highest price that any of the parties was willing to pay was $13.65.” But what about our proposed Dell self-tender offer, which we believe has a total value to tendering stockholders of approximately $15.50 to $18 per share?* I guess Michael Dell believes a bid doesn’t count if it is made by someone who didn’t own the shares when the process began. Michael Dell should remember that it was he, not us, who put a value on the company, thereby placing it in auction, and Michael Dell and the Dell Board would do well to understand that in an auction, even a Dell auction, anyone has the right to bid.
Michael Dell spent many months crafting a merger agreement that would not only “freeze out” all unaffiliated stockholders but would also make it nearly insurmountable for anyone to make a competing bid. Michael Dell is correct when he says the Merger Agreement that he and the Dell Board agreed to is unfair. I believe it is unfair to the stockholders because of its effect on anyone who wishes to make a competing bid. Because of the inclusion of matching rights in favor of Michael Dell/Silver Lake, a competing bidder carries significant risk that their bid would just be topped by Michael Dell/Silver Lake, in which case they would have paid sizeable fees for financing commitments yet be without a deal, a situation we believe is unfair. If a competing bidder is effectively used as a stalking horse against the Michael Dell/Silver Lake transaction, it is reasonable to expect that the Merger Agreement should permit the company to enter into an arrangement with the competing bidder to receive a break-up fee to cover its financing expenses. I guess Michael Dell and his army of advisors did not count on anyone being willing to put up $3 billion of their own money in order to put forth an alternative proposal to Dell’s offer – but miracles do happen.
Conclusion Concerning The Wall Street Journal Interview Where Michael Dell Shows His True Colors
Throughout the interview Michael Dell makes statements such as “my focus throughout has been to our company’s customers and partners.” He states again “my focus first and foremost has been on the company and our employees, customers and partners.” Except in the context of having his deal pushed across the finish line, Michael Dell barely mentions the company’s stockholders. I guess he loses focus when the stockholders come into view. Michael Dell states that “we could do what we needed to do better and faster as a private company.” He has, therefore, for the good of the company, determined he must deny all stockholders the right to participate in the possible good fortunes of Dell in the future. The interview neglected to ask, or possibly Michael Dell refused to answer: “Did you ever once offer, or did the ‘independent committee’ ever ask you to offer, your stockholders a contingent value right or warrant so that they might also be able to participate in the good fortune that might result from you taking Dell private?”
Why I Am Involved
Our system of corporate governance in this country is dysfunctional. In my opinion, boards are empowered to do ridiculous and even inconceivable things to take advantage of stockholders. I have railed against this fact for years. But no one would believe, and with good reason, that I would risk $3 billion because I am outraged at the treatment of stockholders at Dell. While I am enraged, the major reason I am involved is that I believe the Michael Dell/Silver Lake transaction undervalues the company. I have spent many hours discussing Dell with experts, and there are many reasons to believe Michael Dell/Silver Lake’s proposal materially undervalues the company.
Perhaps the most important reason is Dell has a major liability that can be easily removed and that I believe would make the company a great deal of value. It is the CEO, Michael Dell. If Dell can replace Michael Dell, I think that the company would be worth far, far more. I do not say this facetiously. I fully expect to be able to identify a first-class person to run Dell if our slate of directors are elected at the annual meeting. Icahn has a history of bringing in strong new CEO’s that have gotten good results (for example, consider our activities in Biogen and Motorola, to name a few) and Icahn and Southeastern are beginning to see success in replacing top management at Chesapeake Energy. Bringing in a new CEO, unhampered by Michael Dell and the old regime, is in my opinion, both effective and necessary when attempting to turn a company around. It has often been my experience that removal of an underperforming CEO will allow a company to become more productive, more competitive and more profitable and has helped create billions in stockholder value for the companies that I have been involved with. If my past record is any indication, I believe you will be happier and richer if you join me in voting against the Michael Dell/Silver Lake deal. Finally, I can’t help but note that Michael Dell has fared much better selling over 62 million shares in the $32 to $40 range over different periods in the past 10 years. Unfortunately for stockholders, he seems to be a much better market-timer than a CEO. It is time for Michael Dell and the Dell Board to go.
Sincerely,
Carl C. Icahn
Icahn Enterprises LP
* Estimates are based upon the assumptions and calculations set forth in Definitive Additional Materials that we filed with the SEC on July 12, 2013 and July 16, 2013 and reflect only an illustration of the implied value of Dell based upon those assumptions and calculations. The foregoing and the information contained in the Definitive Additional Materials are not a prediction of the specific future market value of Dell stock or any warrant.
US Government: Playing Jeopardy! with the Cloud
All too often organizations start with an answer while being unclear on what the question is. Case in point: the US government’s Cloud First initiative. Originally part of former Federal CIO Vivek Kundra’s 25-Point Plan to Reform Federal IT Management, Cloud First called for government agencies to move three existing applications to the Cloud and consider Cloud for any new IT initiatives. Why they would want to take such actions, other than simply to comply with the initiative, wasn’t clear.
In other words, the answer was Cloud First. But what was the question?
Agile IaaS with the OVH Dedicated Cloud
It is common to see providers deploy cloud instances using automation, but what happens when these same principles are applied to the provisioning of the infrastructure?
In his General Session at 12th Cloud Expo, Jean-Sebastien Bruneau, Cloud Architect at OVH.com, provides insider information on how OVH, winner of the VMware Global Partner Network Award 2013, can make automation work to provide IaaS that scales within minutes.
Jean-Sebastien Bruneau is Cloud Architect at OVH.com. Based in Canada, he joined the team not long after OVH.com opened its first North American Datacenter and has been working his “Cloud-Fu” since. He divides his time evangelising, facilitating customers’ onboarding and leading the internal cloud training program.
Security and Availability Techniques for Cloud-Based Applications
Enterprise organizations are bombarded daily with the myriad reasons to deploy their line of business applications in the cloud. Efficiency, flexibility, cost savings, agility – and the list goes on and on – are just some of the benefits exhorted by cloud computing supporters. And industry analyst firms such as Gartner believe these various benefits will help drive spending on cloud services to $210 billion in 2016 [1].
By all accounts, the future of cloud computing is anything by cloudy. Unfortunately, that assessment doesn’t paint a complete picture of everything impacting cloud adoption at the enterprise level. High-profile outages at several different cloud providers have led some to question whether or not the cloud is reliable enough to trust to “important” applications. The typical argument goes something like this: “The Internet is great, but it wasn’t really designed for business use. I need to be really careful about what kinds of applications I put in the public cloud. In other words, it’s okay if email is out for a couple of hours, but we certainly couldn’t endure extended downtime if our supplier portal was inaccessible.”
Cbeyond Shares Security Basics for SMBs
«When it comes to securing business information, taking the proper precautions on the front-end is well worth the time and effort,» said Cbeyond director of information security Jeff Jenkins, as Cbeyond shared its top five tips to help businesses secure critical information, maintain business continuity and ensure ongoing productivity.
Jenkins continued, «If your business does not have the in-house resources, it’s critical to consult with a technology ally who can provide the insight and support needed to secure your data and maintain operations.»
These guidelines, part of Cbeyond’s «Technology Ally» best practices series, are designed to help SMBs better communicate the benefits of securing information when addressing employees and customers in particular.
Disruptive IT Forces that Are Changing Business
Today four converging IT trends are changing the IT paradigm and will forever change the way businesses communicate, collaborate, store and manage information. Each on its own would have significant impact without the others. However, combined together, they are a disruptive force.
They are:
Mobile devices (BYOD) are becoming a universal portal for individual access to personal and business information.
Social media has moved beyond its initial use case (our kids) to infiltrate businesses for data access, business collaboration, Business to Consumer and more recently Business to Business communication.
Information growth (volume) with rapid access (velocity) from multiple sources (variety) continues unabated and is enabling ‘Big Data’ as predicted a few years ago.
Cloud is becoming increasingly more mainstream from a compute, data retention and access perspective, enabling global information access.
OpenNebula Releases Version 4.2
The OpenNebula Project has just announced the first update of the fourth series of its widely deployed OpenNebula cloud management platform, a fully open-source solution for data center management and enterprise cloud computing. With a sysadmin-centric approach, OpenNebula is the open operating system of choice in the converged data centre, combining a powerful virtualization manager that supports traditional IT features such as fault tolerance and failover, with the dynamic provisioning, elasticity and multi-tenancy of the enterprise cloud.
OpenNebula 4.2 gives users and administrators an easy way to create, publish, share, and manage multi-tier cloud applications and define auto-scaling policies based on service level metrics and time schedule. The new service flow functionality converts an infrastructure cloud into a powerful environment for the execution of elastic business applications. OpenNebula 4.2 also includes improved VMware drivers, enhanced support for Xen4, a new simple provisioning tab for Sunstone, and other minor enhancements like datastore monitoring and more hooks.
Michael ‘Après Moi, Le Deluge’ Dell Digs In
Dell CEO Michael Dell told the Wall Street Journal in an e-mail exchange over the weekend that he intends to stay with the company if his multibillion-dollar offer to buy the joint and take it private isn’t approved by the stockholders.
He also said that he won’t support Carl Icahn’s notion of a leverage recapitalization or Icahn’s schemes to put the company deeper in debt or sell off some its assets to pay shareholders an ostensibly higher price.
Michael reiterated that the specter of $13.75 a share that he and private equity house Silver Lake Partners dangled in front of stockholders last week was a “best and final” offer worth $24.6 billion.
It’s a dime better than the $13.65 a share Dell’s board accepted in February.
He justified the uptick on the grounds that he’s asking for a change in the way the shares are counted so any abstentions are discarded.
Currently abstentions count as “no,” a situation he claims Icahn, who was never a Dell stockholder before Michael put his buy-put offer on the table, has been “unfairly” able to use a minority of shares to block the deal that “the majority of the unaffiliated shares voting on the transaction wanted to accept.”
“That’s why we’ve now requested that the standard be changed to allow the will of the majority of the unaffiliated shares voting on the transaction to control the outcome.”
Icahn personally controls about 8% of the votes but other stockholders like Southeastern Asset Management and T Rowe Price are backing his play.
The paper suggests that Michael’s comments may be a signal to stockholders planning to vote against the buy-out that they’d better support Icahn’s proxy fight to gain control of the company too or be prepared to walk away holding stock that’s lost all of its deal-inflated luster.
The same message may be intended for the Dell board’s special committee which has until August 2 to decide to change the rules or not.
Bloomberg reported last week that the committee wants $14 a share to change the rules.
“Given where we are today,” Michael told the Journal, “I believe the challenges we would face as a public company, including a potential proxy fight, would be significant. But I am ready to fight and I am committed to doing what I believe is right for the company.”
The 10-cent price increase is coming from both Michael Dell and Silver Lake on a pro rata basis. It works out to about another $150 million.
Hard Dollar ROI of Gamification
Join us and guests Kim Celestre, Forrester Research Senior Analyst, and Bill Hussey, Manager of Developing Platforms at Bell Media, for this compelling educational webinar on Wednesday, August 21, 2013, at 10:00 a.m. Pacific. Kim will share Forrester’s Total Economic Impact report to show you the specific, hard-dollar results businesses have driven by engaging customer communities with gamification.
Forrester will provide real life data on how companies leveraging gamification have:
Dramatically increased customer retention revenue
Significantly lowered product support costs
Sourced innovative ideas through the community
From Bell Media, you will learn how they drove up registrations and fan engagement, ultimately driving greater value for advertisers and their brand.