Michael Dell: Emerging Markets Key to Future Growth
Other topics the CEO discussed included Dell's competition, its services and its role in the mobile space. Regarding HP, Michael Dell reiterated what he had been saying throughout the company's conference: that HP's decision to split into two companies—one focused on PCs and printers and the other on enterprise IT technology—was done more to satisfy Wall Street and shareholders than its end users. That will be good for Dell as the company sees the chance to lure away some HP customers unsettled by the change. "No matter how well they do this, they are causing some confusion and disruption in their business," he said. "So we see this as an opportunity." Michael Dell also touched on Lenovo, which is rapidly building up its capabilities in such areas as servers. Lenovo is now the world's third-largest server maker—behind HP and Dell—after buying IBM's x86 server business for $2.1 billion. It also is looking to bulk up its smartphone and tablet capabilities through the $2.91 billion acquisition of Motorola Mobility from Google.In the services space, Dell engineers are working to expand the company's ProSupport enterprise support services to all countries to make it easier for businesses in emerging markets to embrace the vendor's technology, Michael Dell said. He also fended off questions about whether his company has plans to expand its consumer offerings in such areas as smartphones. That won't happen, he said. "You mean enter a business where pretty much everyone else is losing money?" Michael Dell said in response to a question. "We don't have to be in every business, and just because it's fashionable to do it doesn't mean it's a good idea."
And it's not only the businesses Lenovo's buying that make it an interesting challenger to Dell and others, but also the fact that it is based in China, a key developing market. While he wasn't sold on Lenovo's recent acquisitions—neither IBM's x86 server business nor Motorola was profitable—Michael Dell focused more on the opportunity in the $3 trillion global IT market. Dell accounts for about 2 percent of the market and Lenovo about 1 percent. There's a lot of room to grow, he said.