Dell "No Longer a PC Company" as It Focuses on Enterprise
February 27, 2012 2:07 PM
comment(s) - last by
Dell will still devote energy to its XPS lineup
Dell, a company that rose to prominence on direct sales to customers, lean operations, and competitive prices is moving its focus away from the PC market. According to
, this revelation comes courtesy of Brad Anderson, Dell Solutions Group President.
"We're no longer a PC company, we're an IT company," said Anderson. "It's no longer about shiny boxes, it's about IT solutions [that let companies drive efficiencies]."
killed off its netbook lineup
in late 2011.
Dell experienced record growth in its enterprise solutions and services divisions with $18.6 billion in revenue for fiscal 2012 ($4.9 billion for Q4). Revenue from its consumer unit dropped 2 percent for Q4 to $3.2 billion.
also reports that enterprise solutions represent 50 percent of Dell's profits.
Not surprisingly, the signs that a move away from PCs was right there in the company's earnings report. “Our customers think of Dell in much broader terms now, trusting us with their comprehensive IT needs, from the datacenter to the device,” said CEO Michael Dell last week. “The expanding mix of revenue and earnings from enterprise solutions and services is critical to our future."
According to Anderson, Dell will still devote energy to its XPS family of PCs that have been successful for the company.
Rival Hewlett Packard
pondered such a move last year
, but new CEO Meg Whitman
decided against tossing asides its PC unit
. "HP objectively evaluated the strategic, financial and operational impact of spinning off Personal Systems Group (PSG)," said Whitman in late October. “It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees. HP is committed to PSG, and together we are stronger."
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RE: Apple rakes in the profits . . .
2/27/2012 6:20:14 PM
It's not that Microsoft are completely irrelevant it's just that they don't matter much anymore. They seem a bit toothless. They are a big company and will continue to be big (probably) and they seem to have a solid business in the corporate world. But they dropped the ball big time on the mobile computing device revolution in the consumer space and they have a awful lot of catching up to do.
The consumer space is driving IT at the moment and the dynamic of the consumer space is leaching back into the corporate space all the time. It looks like the old model of one OS straddling lots of OEMs (design by committee) seems to struggle in the consumer space where customers are not forced to use stuff mandated by the IT dept but can and do reject that which is clunky and awkward and seek out that which is polished and integrated.
It is interesting that Google bought motorola and it may be a sign that vertical integration is the new essential paradigm. It was argued that Google bought Motorola for the patents (which seem a bit of a damp squib) but I think that was only part of the reason, possibly a small part. I still think Google/Motorola could be working on a cheap/free super feature phone with baked in Google services and targeted at the developing world. I also think it is still odds on that Microsoft will by Nokia.
What we can be certain about is that the world of IT and technology is changing more rapidly than ever and that the old giants are struggling.
Dell should just wind itself up and give the money back to the shareholders.
RE: Apple rakes in the profits . . .
2/27/2012 8:22:03 PM
"Dell should just wind itself up and give the money back to the shareholders."
Dell has a huge enterprise business and they are actually good at it. As for the consumer space driving IT. Its not really happening the way Consumer device makers would have you think it. Like I said in my other post. Call me when the plants that build Mac's and iPhones can do it without PC's and the Win based servers the world runs on. Call me when they come out with the accounting, procurement, logistics, reverse logistics, inventory, shop floor, CRM software etc. comes out on any other platform and integrates it all in to one working ecosystem... No one else is even close, no one else has even started.
RE: Apple rakes in the profits . . .
2/28/2012 7:50:23 AM
Pretty much every medium sized business and upwards runs at least an Exchange server, if not a fully blown Windows server. OSX still causes headaches with Exchange and SMB integration, and most likely always will. You could just as easily argue that Apple dropped the ball when it came to enterprise level server side software and OSs (hint: it did).
Which, in a way, is to their credit. Often, it's about being able to say "Hey, we've been trying to do this for ages but it would appear we're not too good at it, we may as well leave it to others who do it better than us." Maybe this will happen with Bing one day.
Saying Microsoft has failed in the consumer space simply isn't true - the Xbox is the prime example. Apple tried to make a game console once - it was an unmitigated disaster. Microsoft has had a lot more success in this field. The Kinect is a revolutionary device which goes beyond gaming - future versions will find use in hospitals and other fields where gesture based UI can be not only useful, but safe. Microsoft's support of the homebrew Kinect community and the release of the SDK is opening up new avenues for the device, and is a prime example of excellent corporate technology governance.
Defining success in consumer electronics by referring to smartphone sales only is myopic at best. Feature phones are still a larger market globally, and Nokia's brand equity and expertise in this area coupled with WP7 could lead to them taking over in emerging markets where iOS has little foothold.
“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith
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