Dell stock price advanced from about $11 per share to over $12  on discussions of Dell seeking to go private. According to Bloomberg News, Dells was in talks with at least two private equity firms over a potential buyout. Wikibon Co-Founder and CTO David Floyer was on the Morning NewsDesk Show with Kristin Feledy to discuss the pressures on Dell that are causing them to consider such a move. Floyer stated that the key pressures are on the PC part of their business. In 3Q of 2012, their mobility revenue was reduced by over 20 percent and desktops down by 8 percent. He said, “Those [numbers] reflect the PC business is going through a very hard time.”

Microsoft Windows 8 and touch PCs were aimed at kick-starting PC growth last quarter. According to Floyer, that has not happened for them. Betwen Samsung giving up on Windows RT and Dell only has one product in the RT space, the only traction has been on the full touch PCs and the full tablets. But with only four hours of life, those tablets can’t compete with the likes of the iPad or the Samsung tablet line. Floyer reported that the PC market continues to decline, and he forecasted that it will drop at least five percent each year for the next four years.

Floyer went on to analyze Dell’s strategy to move away from the traditional PC business. He noted that they have very good traction with servers, and they’ve made a lot of good purchases in the networking areas and other software, but they need time to integrate those components. He also said that they need to find the right business model and invest more into different sales channels, other than their standard web sales channel.

Floyer explained that going private is a way for Dell to get away from the spotlight of meeting quarterly forecasts and other Wall Street pressures so that they can put everything together to be able to compete with HP and IBM in the realm of total systems delivery and get it right. He reiterated on how important it is for Dell to make a successful transition away from PCs. He recommended that they need to follow software-led infrastructure and software-led storage and bring a different model to the marketplace.

Can Dell be successful in breaking away from the PC business? Floyer believes they have the right start and good management, and now they just need time to execute their plan. If they can pull away from their old revenue model, then everything else will fall into place with time, which Floyer says will take at least a couple of years. He said, “It will be a very different company than the Dell we used to know.”  See the entire segment with Kristin Feledy and David Floyer on the Morning NewsDesk Show.