It's pretty well-known by now that Dell is determined to change its whole approach to providing IT products and services. But its evolution in the last five years-and especially in the last 18 to 24 months-has been nothing short of stunning.
The company that originally was called PC's Unlimited (pictured) and that made its mark by selling personal desktop computers over the phone has come a long way from Michael Dell's dorm room at the University of Texas in 1984 to one of the world's largest suppliers of computers of all types. But it is hardly satisfied with that distinction.
The Round Rock, Texas-based computer hardware maker is fast becoming a full-service IT systems maker, with all the software and services that must go with that identity. And it's making the data center-along with private cloud systems-its No. 1 priority.
To morph into the all-everything IT one-stop-shop that it wants to become, Dell has had to dig deep, gather investment capital and go out and find the right pieces of the puzzle to reshape the company for its next 25 years.
Dell has made no secret of the fact that its strategy for the next few years is to invest in hardware, software and services for new-generation data centers that will contain private cloud computing systems. The company is doing this through a combination of acquisitions and partnerships.
Because it has been the world's largest seller of personal computers and among the market leaders in servers and storage arrays, Dell hasn't had to add much on the hardware front. Its largest acquisition thus far in this area has been iSCSI storage appliance maker EqualLogic in 2007 for $1.4 billion, an amount that many analysts thought staggering at the time.
EqualLogic, however, has justified Dell's investment. Its secret sauce in storage networking and virtualization has brought in satisfactory profit margins in the midrange storage market.
The December 2010 buy of another key storage independent,Compellent, for $960 million, bought the company another progressive-thinking young storage company with a huge upside. Compellent specializes in virtualized storage arrays with automated data-management features, including tiering and thin provisioning.
Improvements Mostly in Services, Software
On the services side-an area that the company is also making a large investment-Dell in September 2009 bought Perot Systems, a provider of information technology services and business solutions for its largest-ever acquisition at $3.9 billion. However, it, too, is paying off big time; Perot Systems is bringing Dell an additional $8 billion per year.
Using some of its newfound profits, Dell recently announced plans to spend $1 billion to build 10 new data centers, in an effort to build its own cloud-services backbone.
In software, Dell has been busy filling in its data center needs. Smaller acquisitions of Scalent (data center automation), KACE (application virtualization), Boomi (SAAS integration) andSecureWorks (cloud security) all have taken place within the last 14 months.