Dell is on a roll. There is no disputing that. Recently, I spent a day in Texas at the companys financial analysts meeting, which was more like an analyst love-in. You would have been hard-pressed to find an analyst not remarking about the companys ability to bounce over the bursting of the dot-com bubble or not expecting Dell to continue to exceed the goals outlined by the team of Michael Dell and Kevin Rollins.
The facts speak for themselves. At the meeting, the company raised its expectations for first-quarter revenues to $11.4 billion, up another $200 million from a February forecast and 20 percent better than the comparable quarter a year ago. The $41 billion company turns over its inventory 115 times a year (way ahead of anyone else) and consistently makes money in industries and economies that leave others penniless. Quite a feat for a company often painted by its competitors as lacking innovation and vision and married to a strategy of moving boxes when the technology world supposedly wants services.
Somewhere around the 20th slide showing a grand financial forward march (slides with bullets stating "3 year capex of $1.6B including $635M of MSL" are way beyond my meager financial understanding), I took to doodling out a couple of issues Dell needs to confront. Here they are. Id like your opinions.
Dell has grown from being a lesser leg of the Microsoft and Intel triangle to being one of the Wintel alliances largest customers. When you become the big dog on the block, you need to bark louder on the customers behalf. Dell needs to show that it is intimately involved in shaping products such as Microsofts "Longhorn" operating system and the next generation of Intels processors, rather than simply continuing to be a good customer.
The same is true for issues such as the Linux operating system, open-source desktop applications and new-form-factor handhelds and phones. There is nothing wrong with waiting for a market to mature to standards before jumping in ($41 billion of market-jumping revenue is pretty powerful), but the company should do a better job outlining the feature set needed before the market will welcome new technologies.