5 Things That Will/Wont Work for Dell

By Scott Ferguson

5 Things That Will Work for Dell

1. A Smaller Dell Is More Nimble
No one wants to see employees laid off, but the move to cut more than 9,000 of Dell’s 82,000 positions-

2. More Emphasis on Notebooks
Dell has been working to reinvent notebooks. With lower average selling prices, laptops remain the hottest part of the PC market-

3. Acquisitions Lead to Better Storage Offerings
Dell took a chance and acquired EqualLogic in 2007, a signal that Dell believes in the future of iSCSI and that savvy storage products can make a big impact in the enterprise market and for small companies looking for solutions to deal with an overabundance of data. Michael Dell believes that iSCSI storage, along with virtualization, will significantly affect the development of the data center.

4. Dell at Your (IT) Service
For years, Dell has lagged behind Hewlett-Packard and IBM when it comes to offering services to customers. That will change. Michael Dell has talked about a $1 trillion worldwide market for services, and how his company plans to use its expertise in hardware and building data centers to offer a number of services for enterprises and smaller businesses. These services will range from cloud computing to overall PC maintenance.

5. A New-Found Love of the SMB Market
Dell has always sold a lot of PCs and servers in the enterprise-

5 Things That Won’t Work for Dell

1. Abandoning the Desktop
Dell is looking to expand its notebook lineup and is closing down its Austin, Texas, desktop manufacturing facility. However, desktop PCs are still critical to the company’s overall business and financial health. While there was little mention of desktops during Michael Dell’s presentation, PCs still accounted for $19 billion in revenue last year.

2. Entering the Crowded Phone Market
For at least six months, there have been rumors that Dell will enter the cell phone or smart phone market. The company has not commented on these rumors, but some analysts who follow Dell believe it’s a mistake for the company to enter a market where it can add little value.

3. Current Channel Strategy
To generate new revenue, Dell officially embraced the channel for the first time. However, the channel has not fully embraced Dell’s model, and Dell has not yet convinced its partners that it won’t try to steal customers away. Dell is also still adjusting to its post-direct-sales-model ways.

4. A Dell on Every Shelf
In addition to the channel, Dell has jumped into retail. While it might be a better way to connect to consumers than through the direct sales model, the retail market is competitive-

5. Emerging Markets
Michael Dell personally visited China, Dell is opening factories in Eastern Europe, and there’s a plan in place to embrace the overseas market. However, HP is already well invested there, and Dell remains tied to the U.S. market, which accounted for more than 50 percent of Dell’s revenues last year. HP, in contrast, pulled in 70 percent of revenues from overseas and seems in a better position to take advantage of the switch to that market.