NEWS ANALYSIS: Dell‘s business is struggling and it’s thrashing about in search of a solution. The company needs to find a solution quickly if it is to survive as an independent IT company.
Dell is in the middle of what might be the most interesting and dangerous periods in its history.
The company has to chose one of three moves. One move, favored by founder Michael Dell will take it private, and two others will see it acquired by outside investment firms and kept public
It won’t be easy, of course, but Dell is searching desperately for a way to fix its ailing business. Doing nothing is not an option because the company has seen weakening sales and profits.
But what exactly can Dell do to fix its business? It won’t be simple. The company has for the last several years watched its PC market share decline due to the comparative success of HP and Lenovo. Although Michael Dell has done a little to right the ship (the company is generating billions of dollars every year, after all), it’s clear that his efforts still haven’t been enough to fix the company’s many woes.
Luckily for Dell, though, there’s still a chance for it to survive and thrive. Read on to find out how:
1. Think about replacing Michael Dell
The company’s shareholders have viewed Michael Dell
as the only person who has successfully run the firm he founded. But perhaps things need to change. Dell has watched his company lose PC market share, miss out on the mobile craze and fall behind in offering cloud-computing services. Maybe Dell needs to go.
2. Consider the other deals
Although Dell’s special committee on its board of directors has argued that Michael Dell’s deal to go private is still best, that might not be true. Competing offers from investment firm Blackstone Group and veteran corporate raider Carl Icahn have both delivered interesting ideas on what they can do to address Dell’s problems while keeping the company public. If Dell wants to survive and thrive, it needs to consider the other deals.
3. Remember the cloud
The cloud is the future of Dell’s business
. The corporate world has for the last several years spent billions of dollars on cloud-computing services, but unfortunately for Dell, it’s still behind the times. The company is trying to catch up, and to its credit, it’s acknowledged its shortcomings. But finding the right formula to succeed in the cloud is an absolute necessity.
4. Don’t turn away from mobile entirely
The mobile world has proven to be a conundrum for Dell. But that doesn’t mean that the company needs to stop. Dell needs to find a way to deliver some sort of value-add to mobile companies, either through working on Android distributions, developing applications or designing devices. Mobile needs to play some role in Dell’s business.