The drama surrounding an attempt by Michael Dell and Silver Lake to make Dell a private company reached anti-climax this morning when a special meeting of Dell stockholders was adjourned, an outcome that Wells Fargo Securities senior technology research analyst Maynard Um predicted in a conversation with me yesterday.

The meeting will reconvene next Wednesday, July 24, another delay of the inevitable, difficult path Dell will face: to fix it, or to break it.

Michael Dell has already decided to fix it and began on that path years ago. But what Dell the company aims to do isn't sexy, is difficult for investors to understand, and will take too much patience, a skill generally lacking in equity markets. Let's face it: Scale-out storage, data center management, and Wyse terminals are about as entertaining as a senate filibuster.

Very much like a man going through a midlife crisis, Dell is slowing down, has a bit of a paunch, is making grand purchases and hanging out with strange new friends, trying to figure out who it is. It’s also a 45-year-old dude driving a Porsche. Dell grew up on the personal computer explosion and the cash flow that business generated, eventually parlaying that into servers, where it still maintains an absolute lock on third place behind HP and IBM, but far ahead of Fujitsu, Oracle and Cisco according to IDC market share numbers. Unlike HP and IBM, whose server revenues declined in Q1 (14.8 percent and 13.4 percent, respectively), Dell’s grew (10.1 percent), giving it a gain of three points of worldwide server market share. Both IDC and Wells Fargo’s Um attributes the growth to what Um calls Dell’s “hyperscale” business -- selling servers into dense data centers, particularly at big Internet companies (like Yahoo, Amazon Web Services, Microsoft Bing).

Here’s the bad news: Worldwide server sales were down 7.7 percent year over year in Q1, and have tumbled five of the last six quarters. Even as Dell’s business grows, companies like Google and Facebook are building their own custom servers, and data center rivals like Cisco and HP are selling solutions that combine networking, storage and servers in a unified infrastructure approach that promises more value and less complexity, albeit at a premium price. Oracle is selling what it calls “engineered systems,” creating appliances that are optimized to run mission-critical applications, again at a premium price.

In the past few years, Dell hasn’t been shy about using its capital to acquire a host of companies in areas that have made Dell even more of a competitor to HP, IBM and Cisco, if not also more boring to petulant shareholders. The company’s product portfolio now includes a variety of storage technology (most notably EqualLogic), networking, security and services (Perot Systems). Dell's most recent fleet of acquisitions include several technologies (Quest, Gale Technologies, Enstratius) for managing the data center and the cloud.

In other words, just as Dell became a low-cost PC and server provider, it is well on its way to being the same across the data center. The company is also likely to make its data center technology simple to buy, simple to deploy and simple to integrate. Dell will do this not just for small and medium sized businesses (its sweet spot), but for companies of any size, and because its services business is strong in verticals like healthcare, Wells Fargo’s Um says, it will also tailor many of its offerings that way, too.

“The next generation data center is going to focus on what Dell calls a compute node,” writes Mike Fratto, senior analyst at Current Analysis in his summary of Dell’s recent analyst gathering, “but that isn’t just the server hardware. The compute node also includes storage, networking, and software needed to make the node available and scalable for enterprise workloads. Fundamentally, Dell doesn’t want to be a box company.”

This isn't happening overnight. "The transformation is going to take time," said Wells Fargo’s Um.

Storage, where Dell made a number of early acquisitions (EqualLogic, Exanet, RNA, Compellent) is especially critical. IDC predicts that the market for big data will grow at a 31.7 percent compound annual growth rate, with revenues of $23.8 billion by 2016, and it predicts more than 50 percent growth in the storage segment. The Dell offering is robust enough that some industry observers say the company’s deal to sell EMC high end storage equipment is as good as done.

Howard Marks, Founder and Chief Scientist at analyst firm DeepStorage says that Dell has integrated flash storage technology into its EqualLogic and Compellent platforms, and it has the technology to compete with the hot, young companies like Fusion-io. In fact, Marks says, Dell has done well at integrating technology from all of its acquisitions, like applying Exanet’s “scale-out” file system across Dell’s product line (now called Dell Fluid File System).

On the networking side, Dell acquired Force 10, known for its high speed data center switching products, to go with its PowerConnect networking line. In security, the company acquired SonicWall and SecureWorks; SonicWall’s technology (firewalls with intrusion detection and anti-virus) is definitely enterprise class, Fratto says, but hasn’t been taken as seriously as gear from Cisco and Juniper.

But the idea here is to sell servers, storage, networking and security as a solution, with Quest’s technology to help manage it all. One quite recent glimpse at the outgrowth from this came in the form of Dell’s Active System 800, an appliance-like solution that includes Dell’s blade servers, an EqualLogic storage array, and Force 10 networking.

The software side has become important enough that Dell hired John Swainson to run that division -- Swainson was once the CEO of CA (Computer Associates), a long-time leader in enterprise management software. Current Analysis’ Fratto says the recent acquisition of Enstratius “may be as important to Dell today as EqualLogic was in 2008.” Enstratius brokers access to a variety of public and private clouds, but uses an approach that lets users deploy workloads based on criteria like features and price. Suddenly, Fratto says, Dell is positioned to be a major player in helping organizations move and manage workloads between the data center and public and private clouds, an approach generally referred to as “hybrid cloud.”

While Dell continues to make some interesting and timely moves in the cloud, including purchases like Clerity Solutions, Make Technologies, and Wyse Technology, it is also moving further up the stack. In 2011, Dell announced a partnership with Cloudera, a market leader in selling commercialized Apache Hadoop, marking Dell’s first foray into the world of big data. More recently, Dell also partnered with Oracle, whereby Dell will package Oracle software, including eventually Oracle’s 12c database, on its systems and resell Oracle services. In this deal, Dell gets to create perhaps a more accessible version of Oracle’s engineered system, while Oracle gets ready access to an enormous market of small and mid-sized companies.

Bored yet? Maybe so. None of this is as sexy as a youthful Dell, re-inventing the PC business around an optimized supply chain model. That business is still a profitable one that generates plenty of cash; Michael Dell is well aware that the computing devices we use are changing, and while the company hasn’t had a monster hit in mobile, it is still an important force on the desktop. Dell should keep using that cash as it has been. That’s where the new money will emerge if Dell can capitalize on all of its assets -- acquired, built, or partnered. And that’s damn sexy.

[Image via Telegraph UK]