AUSTIN, TEX. — As IBM prepares to hand off its PC business to China-based Lenovo, Dell Inc. is trying to redefine itself as more than a PC vendor.
The company, which made a name for itself by selling desktops directly to customers,
reiterated in a briefing for analysts and press Thursday its plans to grow from $49 billion to $80 billion in annual sales. However, the company spent much of the conference reinforcing the fact that it is no longer just a PC manufacturer but a technology company that offers both professional and managed services for enterprises.
“The desktop business is important to us, but it’s going to become less important in the future,” said Dell CEO Kevin Rollins.
Desktops represent only 40 per cent of Dell’s revenue, he said.
Debora Jensen, vice-president of the Canadian advanced systems group at Dell Canada in Brampton wouldn’t answer questions about what percentage of the company’s business north of the border comes from its enterprise offerings, saying only that it’s growing extensively. She said Dell won’t bid on a services contract unless there is at least some Dell hardware involved because it isn’t in the services business just for the sake of being in the services business.
Dell doesn’t want to be a one-stop-shop for services either, but instead wants to focus on its core capabilities for companies looking for a best-of-breed outsourcing solution, Jensen said. “It may be limiting in terms of future direction to outsource everything” to one vendor, she said. Dell will work with partners to offer the aspects of a solution that it doesn’t specialize in, she said. Though Dell “won’t architect a whole strategy” for a company — it has partners such as Cap Gemini that will.
Dell would help companies articulate business cases and lower total cost of ownership, she said. It will work with companies with mixed environments, using partners such as Getronics to manage non-Dell systems.
However, Dell may include contractual provisions that enterprise customers continue to use Dell equipment when a hardware refresh is due. The vendor will also respect a customer’s wishes if that customer wants to stick with non-Dell solutions, Jensen said, but pricing wouldn’t be guaranteed.
Dell also emphasized the fact that it is also in the printer business. Every time a customer prints something using a Dell printer, the printer will detect how much toner is left and how many more of the same types of documents can be printed with the remaining toner. When the toner is low, customers can click on the indicator to go to a page and order toner for their printer. According to Dell, the toner will be shipped to customers within 24 hours 99 per cent of the time.
“Toner and ink are like black gold,” Jensen said. “You could literally give printers away and sell ink.” That’s why, according to her, Dell offers its printers at a lower cost than other vendors. IBM’s exit from the PC business represents and opportunity for Dell and other PC vendors, said Michelle Warren, an IT industry analyst with Evans Research Corp. in Toronto.
Dell is No. 1 in the hardware sales side in Canada, she said. However, today Dell is about more than hardware, she said.
“It’s a technology company,” Warren said. “They could do a bit more work in Canada (to indicate) that they’re strong on the corporate side.”
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