Michael Dell, the founder of Dell
Refocused. The plan to follow IBM's proven model shows that management recognizes a need to shift and Dell will not be happy stagnating in its old business model. Its acquisition of SonicWALL, a data and network security provider, demonstrates Dell's continued expansion of offerings. If Dell can position itself as a one-stop service for government, schools, and business for continuous hardware upgrades along with an expanding buffet of services, there's potential for the company to thrive.
As The New York Times celebrated IBM's 100th anniversary last year, it noted how improbable the company's current success seemed a few years back: "Not so long ago, IBM's corporate survival was at stake. In the early 1990s, it nearly ran out of money. Its mainframe business was reeling under pressure from the lower-cost technology of personal computing."
It remains to be seen if any other company can pull off a turnaround like IBM, but both Dell and Hewlett-Packard
Sits on the mobile sidelines. Remember the Dell Streak? Unfortunately, neither does anyone else. Dell's ill-fated tablet suffered a delayed launch, and was criticized for its outdated operating system, before both the 5-inch and 7-inch versions were discontinued last year. Dell may not be giving up, as company Chief Commercial Officer Steve Felice believes, with respect to tablets, that "on the commercial side, there are a lot of concerns about security, interoperability, systems and device management, and I think Dell is in the best position to meet those."
And sits on the global sidelines. Dell hopes to establish itself further in Brazil, Russia, India, and China, where it saw 15% revenue growth over the past year (whereas revenue from the U.S. fell 5% over the past year). Unfortunately, U.S. revenue still makes up almost 50% of total revenue, compared to HP, for which the U.S. constitutes only 35% of revenue. Turning around both strategy and geographic focus will be large obstacles Dell must overcome before it can succeed again.
A new consumer push. Dell recently released its XPS 13 Ultrabook, taking design cues from Apple's MacBook Air. The laptop sports Corning's
The final call
Can Dell successfully embody a new and more-lucrative business model to sustain itself for the future? I believe it can, and unless the future is made up of only IBM servicing all enterprise customers, and only Apple selling all computers, Dell will remain a solid company into the future. With founder Michael Dell back in charge, I think management understands how to navigate Dell back into a market darling, and I've issued a bullish CAPScall to hold myself accountable for this pick.
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