Dell Inc. confirmed Thursday that it had acquired boutique PC vendor Alienware, a move that will add some zing to the company's image.
Although Dell's acquisition was widely anticipated, Alienware chief executive Nelson Gonzalez said that his company will remain a wholly-owned subsidiary of Dell, continuing its own brand, design, sales and marketing, and support. Terms of the deal were not disclosed.
For consumers, the purchase will mean that Alienware will now access Dell's well-known supply-chain efficiencies, ideally reducing wait times for new PCs that Alienware executives said have swelled to as much as a month or more. Interestingly, the deal also means that a PC containing a processor from Advanced Micro Devices will finally contribute to Dell's bottom line.
Gonzalez said that to expand Alienware's product line with more, highly-tuned boutique products, the company needed more resources. Although the company sells its PCs to customers in Japan, Korea, and Asia, Alienware didn't have the cash to fund the worldwide expansion it needed, he added.
"We were at a crossroads, we were at a point in time where we had to make a decision to go public or to perhaps merge with another entity if it made sense," Gonzalez said. "There were very few organizations out there that we would do this with—and there's only one that I could think of, and that was Dell, just because of the similarities in terms of the direct business model, and that we have a lot of similarities with the [company]. The problem is that we were at these crossroads, we needed to raise capital, and we had never raised capital at this company from day one."
"We needed to get bigger, and we needed to release more products," Gonzalez added. "We do our own designs and our own form factors, and that costs a lot of money, frankly."
