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With buyout set, Dell needs to lay out PC strategy, analysts say

Sharon Gaudin | Feb. 6, 2013
Dell's buyout deal should give the company renewed business flexibility and stealth but now buyers need to know if Dell will be in the PC market for the long haul.

However, last July, Michael Dell said during a conference that the "new Dell" really isn't in the PC business anymore. It was a surprising statement from the man who runs one of the largest PC makers in the world.

"Well, in the last five years or so, we've really made a concerted shift in our business towards end-to-end IT solutions," said. "And if you think about the businesses that Dell is in today, there are really four of them. Certainly, we start with the client business, which is kind of transforming with all the things that are going on in mobility and client virtualization."

But after quickly mentioning his client-based business, Dell went on to talk more at length about the company's enterprise data center, server, storage, software, services and networking business.

Robert Enderle, an analyst with The Enderle Group, said he sees Dell remaining focused on its client strategy.

"Basically, Dell is going back to startup mode. What will emerge could be very different," Enderle added. "I think we will see Dell do some really interesting things with Microsoft going forward on the client."

King, though, said he expects Dell to continue expanding its business focus to be more of an enterprise IT company than a PC maker.

"Dell has been on the road to becoming an end-to-end IT vendor since Michael Dell returned in 2007, and I don't expect this deal to significantly impact or change that transformation," he explained. "Historically, data center solutions, software and services deliver much higher profit margins than commoditized products like PCs, so continuing to focus on those areas makes perfect business sense."

Moorhead said Dell needs to make its intentions clear before its competitors take advantage of any user confusion.

"For Dell's sake, I hope they make some definitive statements around that," he added. "If nothing else, HP and Lenovo will undoubtedly use any uncertainty to drive more of their own business."

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is sgaudin@computerworld.com.

See more by Sharon Gaudin on Computerworld.com.

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