With Dell returning to the private sector, some rivals quickly put forth the idea that Dell won’t be able to afford the necessary R&D and M&A to remain competitive or innovative during this industry shift away from consumer PCs.  But Dell is a cash-heavy firm, despite the debt racked up from its pending stock buyout, and with no shareholders to pay every quarter, Dell could very well retain the capital needed for proper resource allocation in research, mergers and acquisitions.  Wikibon senior analyst Stu Miniman appeared on the SiliconAngle NewsDesk this week to discuss how Michael Dell’s decision to take his company private will impact the hardware giant’s ability to innovate for the future.

Industry competitor Hewlett-Packard was first to predict that Dell’s ability to compete with products will be “extremely limited” in the near term, but Miniman does not agree with this prediction. There’s no denying that the $50 billion Dell currently owes to bankers is a big burden, but he believes it will not have a negative effect on operations.

In the past five years, the vendor has spent billions of dollars making high profile acquisitions in the storage, cloud, services and networking verticals to bolster its enterprise portfolio.  In theory, investments would be cut until Dell repays the money it borrowed, but Miniman points out that is in fact not the case.

While it still had a ticker, Dell spent $3 billion on stock buybacks every year. Now that it no longer has investors to appease, that money can be reinvested into R&D and acquisitions, filling the budget gap created by the privatization. Miniman added that that if anything, the fact Dell no longer has to answer to shareholders will give management more freedom to focus on strategy and long term goals.

Miniman provides examples to back his argument. He notes the company launched a big contract with the Japan Advanced Institute of Science and Technology this week, and mentions the new series of OpenFlow-enabled switches that Fusion10 recently unveiled. He praises the vendor’s data center portfolio but admits that a lot of work needs to be done.

One of the last points the Wikibon analyst tackles is whether Microsoft’s influence as a minority stakeholder will hinder Dell’s transition to the so-called post-PC era. He says that there no doubt the software maker will have a say in certain matters relating to consumer tech, but its $2 billion share is simply too small to permit too much pressure.

See Miniman’s full analysis below.