Dell Moving from PCs to a Provider of Enterprise Solutions


(B) It is interesting to see the transformation of Dell from the early 90s to the beginning of this decade. While Dell was in its inspection a provider of PCs leveraging Intel processors and Microsoft operating systems, and the company core competencies were in supply chain management and channel marketing, the company has now two focus: consumer and enterprise. The consumer business is only 20% of Dell revenues while its enterprise business is over 50%. And, Dell is not only selling PCs anymore but also storage, networking, security, and services; product lines that Dell acquired from many companies such as Perot Systems, SonicWALL, Wyse Technologies and many others.

Interviewed by Maria Bartiromo this week on CNBC (, Michael Dell is explaining the shift of Dell strategy, through acquisitions, to provide enterprise products and services. Dell is now the number 3 PC maker (after HP and Lenovo) and plans to cut more than $2 billion in spending during the next three years by cutting down its supply chain and sales organizations. Michael Dell also said that the company would offer a quarterly dividend that will start at 8 cents a share.

Interesting to compare Dell’s transformation to the one of IBM and the one that HP is presently going through (see our previous blog post: When Technology Kills Technology).

IBM shifted from being a one-stop shopping vendor for everything to be a provider of enterprise services, servers, and software, selling its PC division to Lenovo, and its networking division to Cisco Systems while acquiring over 70 mid-sized enterprise software companies since 2001 such as Cognos, Sterling Commerce, BigFix.

At the same time, HP expanded its PC division with the acquisition of Compaq Computers, expanded its networking division with the acquisition of 3Com, and expanded its service division with the acquisition of EDS. Now HP looks very much like IBM was 15 years ago.

Note: the picture was taken from the CNBC interview on June 12.

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Categories: Computer Systems