Moving in New Directions

By Chris Preimesberger  |  Posted 2011-09-19 Print this article Print


Now the company Dell built is briskly moving into new areas that don't involve selling and maintaining hardware-something that would have been a completely foreign concept five years ago. It is winding down its storage reseller relationship with EMC and developing new-generation IPs with storage acquisitions: EqualLogic (bought in 2007) and Compellent (in 2010).

Dell also is averaging about two new software company acquisitions per quarter. Recent examples include application optimizer KACE, data management specialist Ocarina Networks, security provider SecureWorks and cloud infrastructure integrator Boomi.

"The computer industry started out as a hardware business, but customers now are showing more interest in solutions [preconfigured combinations of software, hardware and services] than they are in products," Michael Dell told eWEEK in an interview at his office in Round Rock. "So that's obviously where we're headed.

"Look at the example of a large hospital. What they really don't need is IT. What they want are better outcomes for their patients. That means they need all sorts of tools, like evidence-based medicine, health information systems, better accuracy of prescriptions, claims adjudication systems and affiliated physician systems.

"That's what we do now. We want to provide all these tools in what people refer to as the cloud."

Filling Out Product, Service Offerings

As a result of its acquisition activity in the last five years (since Dell returned to the CEO job in January 2007 after a three-year hiatus as board chairman, replacing Kevin Rollins), the company is moving into providing cloud systems and cloud services in a big way. Put it all together, and Dell is quickly approaching the rarified air occupied by such venerable all-purpose IT companies as IBM, Hewlett-Packard (HP) and Oracle.

"When Michael returned to take back the CEO job in 2007, the company was struggling and hadn't changed its business model," said Charles King, an analyst with Pund-IT Research. "Back in 2007, change was in the air; there was a strong sense that the old model of pursuing only the business of low-margin, industry-standard products for their own sake was not going to continue to be as profitable as in the past."

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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