By the early 1990s, Dell was a nerd no more. His company, Dell Computer Corp., which was born in his college dorm room in 1984 at the University of Texas at Austin, was considered an innovator, assembling IBM clones on the cheap and then selling them to people over the telephone and through mail order when the traditional channels had been through brick-and-mortar stores.

The company's sales were approaching $800 million and its earnings were expected to double at what was a rough time for computer makers. He had already taken his company public in 1988 but still owned 35% of the stock, which was worth $300 million. He was married and had a child on the way. He joked that they would name her "Buya," as in, "Buya Dell" (they ended up naming her Kira). He was 26 years old.

A lot has obviously happened since then. Other computer companies moved to selling their wares over the telephone and through mail order, so Dell pioneered selling them over the Internet. Other companies followed. Dell then began focusing its efforts on selling to corporations, which other computer makers followed.

Over the years, it became harder and harder to differentiate the company from any other PC maker, no matter which market Dell targeted (consumer or business) or which new products it introduced (from laptops to servers to printers to the tablet the Streak, which flopped) or which acquisition it made (from IT service company Perot Systems to software provider Quest Software Inc. to systems management company Kase Networks Inc. to security firms Sonicwall Inc. and SecureWorks Inc. to, more recently, data center services providers such as EqualLogic Inc., 3Par Inc., Networked Storage Co. and MessageOne Inc.).

Thus, while Dell's sales surpassed $62 billion last year and its market value was over $23 billion, Dell's earnings and stock have fallen and it's dropped to the No. 3 PC maker after Hewlett-Packard Co. and Lenovo Group Ltd.

So Dell is going back to the dorm room, in a way, with his long-awaited announcement on Feb. 5 that he is taking the company -- known for the moment as Dell Inc. -- private in a $24.4 billion deal. The buyout, as is widely known, will be financed with $15 billion in debt provided by Bank of America Merrill Lynch, Barclays plc, Credit Suisse Group and RBC Capital Markets LLC and including a $2 billion subordinated note from Microsoft Corp. Another $1.4 billion is coming from Silver Lake, and $750 million will come from Michael Dell's estimated $16 billion fortune (the rest will be drawn from Dell's 14% stake and cash on the company's books). "I believe this transaction will open an exciting chapter" for the company, he said in a statement.

I'm not surprised at his move. A lot of successful builders of companies -- Richard Kinder of
energy transportation giant Kinder Morgan Inc. comes to mind -- have taken their companies private to realign their finances out of the glare of Wall Street, only to re-emerge stronger than ever and ready to make serious acquisitions (Kinder Morgan's $21 billion purchase of El Paso Corp., for example).

But Kinder Morgan is in the cash flow-stable energy transportation business, not the volatile technology industry, which has been littered with LBO bombs (First Data Corp. and Freescale Semiconductor Inc. among them, Gimme Credit analyst Dave Novosel noted in a Feb. 6 report). "Unless it makes further acquisitions, Dell is still going to be heavily reliant on the PC business, not an enviable position in our view," he wrote.

So if Dell is successful getting the take-private deal through shareholders (Novosel doesn't expect any serious bidders to emerge from the go-shop period being managed by Evercore Partners Inc.), will he transform the company from one that sells computers like commodities -- an approach he pioneered through his phone and mail-order business in the early days -- to a more profitable provider of high-end products and services such as IBM Inc., HP and Oracle Corp. (including possibly selling off its PC and peripherals businesses, much like IBM did in 2005 selling its PC business to Lenovo for $1.7 billion)? Or will he regain the company's No. 1 PC position in the world, which he held just six years ago, by selling more laptops into emerging markets?

Knowing Dell, he probably will do both and more, and maybe something no one has even thought of yet.