NEW YORK—Dell wants to just do it better.
The Round Rock, Texas, PC maker, which has been battered by sagging financials, a probe by the U.S. Securities and Exchange Commission, and questions about the leadership of its chief executive, Kevin Rollins, has embarked on a companywide effort, “dubbed Dell 2.0,” designed to put itself back on track, Rollins said during the companys Sept. 12 Technology Day here.
By doing its job better—which means working to improve product design, beefing up its services and support operation, extending its partnership with storage maker EMC, and offering more interactive platinum-level professional services—Rollins said Dell aims to shed recent criticisms of its service and support and thus win back customers loyalties such that it will be able to return to its historical patterns of increasing revenue, profit and shipments.
“We know weve not done this perfectly in the past,” Rollins said, referring to service and support. “The Dell experience is the number-one priority of the company. It is where we are going to invest this year and for the long term to provide the best customer experience, bar none.”
To that end, Dell has done work to respond to customers concerns, including introducing on Sept. 13 desktop PCs with Advanced Micro Devices processors—it will offer servers with AMD Opteron chips in the fourth quarter, one person familiar with the companys plans said—while working to offer businesses more energy-efficient hardware. Its also revamping its technical support for small businesses and consumers who it says have been frustrated by being transferred between support techs. It now aims to solve customers problems in a single phone call, Rollins said.
“The common goal [of Dell 2.0] is that were committed to doing everything … better,” Rollins said. “We know that when customers are happy and we meet their needs … the revenue of the company continues to expand.”
But Dell, which has been criticized by some of its corporate customers of late, may have some work to do to get there. Several Dell customers told eWEEK they are expecting to see both more innovation and more proactive support from the PC maker.
However, after hearing Rollins broad vision for getting Dell back on track, some present at the event said they would have liked to have heard more exact details on the companys plans.
“I wanted more details on specific strategies … sort of a bigger vision,” said Richard Shim, a San Mateo, Calif.-based analyst with IDC, who attended the event, following Rollins presentation.
The lack of specific details left analysts to wonder how well Dells fundamental business model, selling PCs direct to customers, can hold up against stronger competition from rivals such as Hewlett-Packard, which sells both direct and through distribution channels to customers.
Given Dells troubles of late, Shim said analysts want to know, “Is that a sign that the [Dell direct-sales] model is broken or it just needs tuning?”
Rollins, in his address, said the company has been making the effort to respond more proactively to customers needs, including taking things such as manageability and, now, energy efficiency into account when designing its computer hardware.
Dell, he said, designed the OptiPlex 745—a new corporate desktop based on dual-core Intel Core 2 Duo processors—to use far less power and to offer several more user-friendly features, based on the feedback of IT managers.
The machine, which has built-in Dell power management technology in addition to features such as a centralized management console, is up to 70 percent more power-efficient than its predecessor, Rollins said.
That means one of the machines can save up to $80 in electric costs per year for a business, he said.
For consumers and small businesses, Dell has also taken measures such as cutting down on the amount of preloaded software it puts on its PCs. It dropped the number of desktop icons from around 20 to 9, for example, company executives said.
Dell has also adopted a new “resolve in one” mantra for its technical support. It aims to fix a problem inside of a single tech support call by beefing up the training of its technicians. Dell has also created a new DellConnect tool that can allow one of its tech support agents to remotely access a customers PC and fix some problems.
Resolve in one “is the new battle cry,” Rollins said. “Were working to create this model by improving the quality of our technicians and making sure that we hire the best and give them the best tools.”
But for some the battle cry has sounded more like one to remove Rollins.
During a Q&A session, company chairman Michael Dell reaffirmed his confidence in Rollins, who has been with Dell for more than a decade in a number of top leadership positions. Dell even took some of the blame for the companys recent missteps.
“I believe Kevin Rollins is an outstanding executive. I think characterization of the companys challenges being only of Kevins doing” are incorrect, he said.
Given that Dell and Rollins run the company together, “if you want to blame somebody you can blame me too,” Dell said. “Our company will continue to grow and prosper and do well. Any press speculation on [removing Rollins] is completely useless. Its not going to happen.”
Instead, Dell indicated, the company intends to move forward with its Dell 2.0 plan, the executives indicated.
Of course, Dell 2.0 does involve changes to the way Dell works with suppliers, as well as an expansion to its factory network and even tweaks to its sales model, all in the name of efficiency, the executives said.
Rollins said Dell will announce a factory in Western Europe in the near future. Meanwhile, its challenged its suppliers to help it build more energy-efficient products by supplying Dell with lower-power parts, he added.
However, despite the potential to see some changes—Dell recently opened a store in Dallas, for example—the PC maker will continue to focus on direct sales, including methods such as direct-to-business and direct-to-consumer online sales, Dell said.
“Its my belief that if you go forward another 5 years or 10 years, that the propensity for consumers to buy things online, including computers, will increase not decrease,” Dell said. “But that doesnt mean we wont experiment and reach out to other means to reach the market.”
Ultimately, Dell aims to think more about the long-term relationships it has with customers, the executives said, and thus evolve from what they said is the best PC company to the best systems company.
Editors Note: This story was updated to include information about new desktop PCs and comments from an analyst.
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