Dell needs a buyout, but how about customers?

(MoneyWatch) Now that Institutional Shareholder Services has recommended that Dell shareholders vote for a buyout from founder Michael Dell and private equity firm Silver Lake, chances are that the deal will go through.

ISS says that the choice is the best one for institutional investors such as pension funds and hedge funds. It also may be necessary medicine for the computer industry and its corporate customers as long-established vendors try to find new ways to survive with strategies that often anger or worry shareholders. However, choices for consumers may continue to contract, which could send prices up.

• ISS recommends vote for Dell founder's offer
• Dell's going private may hasten its downfall
• Dell would be better off without Dell
• Why Dell should quit the PC business
• Dell goes private to find maneuvering room

Dell the company first talked of going private in early February. According to a press release, the strategy was intended to provide value to shareholders in the face of falling stock prices even as the company continued to pursue a new long-term strategy. An increased emphasis on servers (particularly for the rapidly evolving cloud-computing market), networking and other infrastructure technologies would help mitigate the continuing decline of the PC market. According to analyst firm IDC, the problems are worse than many thought.

Unfortunately for Dell, just as with HP, making the necessary shifts are difficult for a public company. Investors are concerned with getting value from owning stock. A big part of Dell's business has historically been in PCs. That was the keystone of Michael Dell's company from the start.

The Dell's PC business is hurting badly. In its fiscal year 2013, which ended in January, consumer PC sales dropped by 20 percent year over year. Product revenue from public and consumer segments offset gains made in large enterprises and small to medium businesses.

And yet, consumer sales still made up 19 percent of net revenue. That could make investors nervous about de-emphasizing consumer product lines, exactly the sort of reaction that made HP shelve plans to spin off or sell its PC division.

But the infrastructure that satisfies consumers is significant. To strengthen the corporate business, Dell might have to make consumer PCs secondary, if not an afterthought. It's the sort of move that a private company could pull off but that might be impossible for a public one.

The ISS recommendation, which carries a lot of weight among big investors, could be enough to help bring about acceptance of the deal. Michael Dell and his partners have said that they won't raise their offer, Carl Icahn's plan involves keeping Dell a public company, leaving most shareholders' prospects an unknown.

This likely means that, by this time next year, Dell will be a private company -- and could be on its way out of the traditional PC business. Consumers could find one fewer major supplier of personal computers. Such a change could herald an increase in prices, and those who still buy PCs will have to pay more, whether they like it or not.