Is Dell Inc. Becoming a Serious IT Player?

I have been pretty tough on DELL in a past post (re: Acquisition of Perot Systems), but a recent, and very rare, interview with CEO Michael Dell has me re-thinking my previous stance.

Questions: Was I too tough on them and did I miss something?

Granted, I hedged my bet/post with a relatively quick follow-up post regarding the incredible speed and efficiency they performed the acquisition of Perot, but still…. I did not expect this company to be doing as well as they currently are.

Answers: I do not believe that I was too tough, but I will acknowledge the fact that I did miss something. I missed the abilities of the founder to come back, re-take the reins and alter the vision, strategy, and operations of a brand that was previously pigeon-holed and on the downslide.

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So…. I now find myself in somewhat of a conundrum regarding this technology player; and asking myself a new set of questions:

Questions: Are they for real and can their strategy be sustained?

Answer:  I believe that yes, they are for real and that losing the bidding-war on 3PAR to HP will probably benefit them in the long-term. However, 50+% of their revenue is still generated by PC sales and that is, and will continue to be, lessened by other pure-play PC OEM’s cutting into their margins. Along with that, they still have a steep mountain to climb in regards to Data Center (DC) solution providers such as: HP, IBM, and Cisco. 

Summary: With Michael Dell and his re-vamped management team back at the wheel doing what they are doing, one should not count this company out. I somewhat liken this to Steve Jobs’ history with Apple. However, I maintain my earlier stance on this company, and that stance is: too little too late and sustainability is a long shot.

Regards,