The push in the

By Jeffrey Burt  |  Posted 2005-04-06 Print this article Print

printer business"> Increasing that will be important as Dell tries to grow the business, Angele Boyd, an analyst with IDC, said in an interview before the meetings. For the largest printer vendors—such as Hewlett-Packard Co. and Lexmark International Inc.—such products account for more than half of printer revenues, said Boyd, in Framingham, Mass.
Perra said he didnt expect that percentage to increase drastically in the near term, but added that Dells key push in the printing business is building up the companys installed base, which will lead to greater sales of such "consumerable" products.
In addition, such services as enabling customers to automatically order more ink cartridges from Dells Web site, and shipping up to 99 percent of all printers on the same day theyre ordered, will help, he said. Boyd said that while Dell is seeing high growth rates in many of its printer products, HP still dwarfs it in overall numbers and market share. What Dell needs to do is grow its commercial printer business, she said. Corporations do more printing than consumers, and thus consume more ink and toner. "They made the most gains in the low-end consumer [segment]," Boyd said. "Whats next in terms of commercial? … The strategy is to get the installed base up. The question now is, is that installed base paying off, or when will it pay off?" Officials with Dells services group said they will continue to be careful in deciding in which direction to expand. The company currently focuses on professional services, training services, managed services and support services. However, Dell is addressing only a $90 billion segment of a $600 billion industry, and currently has an annual run rate of $4 billion. Click here to read more about Dells new notebook computer, the Latitude X1. Joe Marengi, who like Perra is a senior vice president of Dells Americas unit, said Dell has no ambition of growing a massive services business to rival the likes of IBM or HP. Instead, the company will focus on companies that already do business with Dell through hardware purchases, he said. "If there is a certain project out there that doesnt have anything at all to do with Dell, then we probably wouldnt bid on it," Marengi said. Even with that, however, Marengi and Gary Cotshott, vice president of Dell Services, said there is high growth opportunity in services. Over the past six years, Dells services business has grown at an annual compound rate of 30 percent, and last year grew 34 percent, they said. Check out eWEEK.coms for the latest news in desktop and notebook computing.


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