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Posted on February 6th, 2013 by Barry Collins

Can Dell do without PCs?

Dell Latitude Z back

Michael Dell is set to reclaim his eponymous company from the stock market, allowing him to make the sweeping changes the company needs without the scrutiny and fear of triggering a collapse in the share price that comes from being a PLC.

Even this morning, The Times and others are speculating that one of those sweeping changes will be the end of PC manufacturing, allowing Dell to make an IBM-like transition into an enterprise hardware and services company.

It’s a plausible strategy, but an unlikely one, and one made all the more improbable by the involvement of one of the companies helping Michael Dell buy his own firm back: Microsoft. Steve Ballmer has agreed to lend Dell $2 billion to complete his buy-back, and it seems highly unlikely that Microsoft would have taken such a step without cast-iron assurances that Dell wasn’t about to completely undermine confidence in the PC market by pulling out.

If Dell was planning a retreat, I’m pretty sure Michael would have had to look elsewhere for a hand out

Indeed, Microsoft made the purpose of its investment abundantly clear in its statement on the loan: “Microsoft is committed to the long-term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future.” If Dell was planning a retreat, I’m pretty sure Michael would have had to look elsewhere for a hand out.

It is conceivable that Dell may exit the consumer PC market, focusing instead on businesses, where there are fewer credible rivals and few signs that customers are willing to forgo a new PC in favour of a tablet or smartphone, as they are in the consumer arena.

I hope that’s not the case, because Dell still has plenty to offer the consumer. Dell PCs, laptops and tablets are rarely breathtaking, but they’re dependable. If someone asks me to recommend a reasonably priced laptop, I invariably send them to Dell – and I’ve not had a single complaint yet.

Dell might not set pulses racing, but it’s the regular heartbeat of the PC industry.

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8 Responses to “ Can Dell do without PCs? ”

  1. bookmac Says:
    February 6th, 2013 at 2:57 pm

    Can Dell do without PCs? Who says they are going to?

    Smart money is on DELL being the mid to large enterprise IT company – from the PC to the Server room and in-between.

     
  2. GW74 Says:
    February 6th, 2013 at 3:35 pm

    Can Dell do without PCs? I don’t care, but the world can do without Dell PCs.

     
  3. fiona Says:
    February 6th, 2013 at 4:04 pm

    Fewer credible rivals? like HP, lenovo and Toshiba?

    Compared to these Dell were a joke. My organisation tried very hard with Dell. Having a committment with them for a few years where they just plain failed to deliver.

    The initial contract and relationship was good. The failure was everything subsequent to this. Accessories/peripehrals and follow up action was a failure with Dell unable to Dell iver. Other suppliers provide equipment equally as good and just as competitive. The different is they are able to provide the support and follow up action which Dell were not able to. probably because of over eager expansion at the expense of what used to be their forte – service. Dell are rely too much on accountants rather than service staff.

     
  4. wittgenfrog Says:
    February 6th, 2013 at 4:24 pm

    @Fiona
    I’m amazed to hear of your problems with Dell who were always my ‘go to’ company for Servers & PCs when I was in Mid-size Corporate IT.

    Admittedly this was a few years ago, but in my current role in an SME they still provide good, honest kit at sensible prices.

    Anyway I wish them well. Back in the good old\bad old days it was Dell who shocked the likes of HP out of their complacency towards smaller companies with simple to buy, set-up & use Servers & PCs. Their printers are good too!

     
  5. wittgenfrog Says:
    February 6th, 2013 at 4:30 pm

    I’m not sure I buy their likely ‘exit’ from the consumer market, though this will be a case of the financial numbers leading the argument.

    I’d guess Michael Dell has a sentimental attachment to the ‘Home’ PC which he helped to ‘invent’ as a business. I’m equally sure that with a mountain of debt and a lot of his own cash involved he won’t be THAT sentimental.

    New \ better products and services are required which ever way the revamped Dell decides to go. I agree with Fiona that in some sectors (Corporate Laptops for instance) Lenovo has an edge that Dell needs to blunt.

     
  6. philgq Says:
    February 6th, 2013 at 8:51 pm

    To be honest computers are going to stay on office desks for a long time yet. It would be daft for Dell to go into businesses and say we can take care of everything except the computers. That said, they don’t have to make them themselves, they could sell the manufacturing facilities to company who could white label them.

     
  7. Lee Grant Says:
    February 6th, 2013 at 8:52 pm

    I hope Dell doesn’t stop making PCs as upgrading them into something usable once their owners realise they’ve bought a pig-of-a-machine is a great source of revenue for us independents.

     
  8. David Wright Says:
    February 7th, 2013 at 8:43 am

    That is a change from a decade or so ago, where the saying was “friends don’t let friends buy Dell.”

    Certainly the corporate side of the fence would be critical to their success. They rely a lot on offering a complete solutions pallette to their customers.

    With the heavy investment in recent times in network and storage infrastructure devices, abandoning the PCs and servers would leave a huge hole in their offering.

    With the consumer side, I could see them, maybe, dropping some of the real bargain-basement items, where they make little or no money.

     

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