WidowPC Gaming Computers - Dell Buys Alienware
It's official. Dell has announced that they have purchased Alienware. This is great news for Widow...more on that below.
At this point, I believe it is fair to announce that WidowPC was contacted by Michael Dell on November 13, 2005 for a similar purpose. Although we were not signed to secrecy I didn't think it would be right to publicly announce Dell's plans until it was public, after what was understood to be a private meeting, unlike one of our mutual competitors. Read on for pictures of the WidowPC truck in front of Michael's office and my perception of why Dell decided to take the uncharacteristic step of growth through acquisition.
Motivation
Michael mentioned that he was concerned with Alienware's recent growth and was interested in purchasing Widow with the aim of growing the company towards delivering "a better value proposition to the customer" compared to Alienware. Michael also referred to the current brand positioning of Dell as "your father's PC."
Interpretation
My take on the meeting was Michael wanted Widow to weaken Alienware through amped up direct competition in Alienware's key gaming market due to Alienware's growth into Dell's highly profitable server market and Michael also wanted to advance Dell's image within the influential gaming computer niche. This was one of the sticking points in the meeting with Michael-he only wanted Widow to compete with Alienware in the gaming computer realm. So, if Michael was to purchase Widow, the company would be limited to this one small niche. Obviously, not a good thing for Widow despite our love of gaming. This was one of several points that made the potential deal something both parties were happy to pass up.
Who Benefits
My review of the Alienware acquisition is that it's a great thing for Dell simply as insurance against a potential future rival. Remember that Dell followed a similar pattern of growth and was not taken seriously by Compaq. It's a terrible deal for everyone at Alienware except for those who reaped the cash windfall. The perception among Alienware employees seems to be that they are going to get laid off as attested by the number of Alienware staff resumes that are now floating around our offices and several other high end boutiques. Any well managed merger brings efficiencies through elimination of redundant resources. So, the layoffs are a no brainer. I'm not sure whether customer service quality is effected here. Alienware outsources to Costa Rica, Dell to India. It's a toss up which is worse, in my biased view.
Widow and True Boutiques Benefit
Dell purchasing Alienware is very good news for WidowPC, Voodoo, Falcon, and the other true boutiques. One of the major growth factors in Alienware's past was the tendency for discouraged, high end Dell customers to look for another vendor and settle on Alienware. Since Alienware now is Dell, Widow is likely to see a long term increase in new business.
Images from Joshua's camera phone before a couple of our meetings with Michael:
The WidowPC "Spider Truck" in front of Michael's office building in Round Rock
The November/December PCGamer Magazine with WidowPC on the Cover ... Pic taken as we get security badges on the way in to meet with Michael.
As we told Michael in our last meeting with him, WidowPC will continue to beat Alienware and Dell in quality and customer service - one happy customer at a time.
Regards,
Joshua
Founder, WidowPC
Carification: I've received several emails asking if we are still in talks with Dell. That should be clear in the statement "WidowPC will continue to beat Alienware and Dell in quality and customer service - one happy customer at a time." So, for those of you not seeing the clarity, we are not now in talks and we are not intending to ever be bought by Dell.
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