Feeds

This is how Dell will become a $60bn company

Where America leads...

  • alert
  • submit to reddit

Internet Security Threat Report 2014

Dell CFO Kevin Rollins gave a strategy overview Wednesday night (October 8) saying that the company was on track to become a $60bn company by the end of 2006 and telling the world just where it would get its growth from.

Much of the presentation was given over to market share issues with Dell claiming that it has a market share of just 17.5% of the global PC market, but in the US where it has so far concentrated its effort, it has a 31% penetration. Rethink pointed out in its review of Dell in January this year, that simply internationalizing its existing US success could turn it into a $100bn business by the end of 2008. Rollins seems to have done the same sums and agrees with our assessment. He said that the company is gaining 2.6% of market share each year now in PC supply.

From an almost non-existent revenue stream last year in software and peripherals, in services, in networking equipment and in servers and storage, Dell reckons that these will make up roughly half of its $60bn revenue by 2006. And this is without factoring in revenues from consumer electronics and digital media businesses that Dell only launched into over the last two weeks.

However Rollins did warn that this market would only take off if driven by standards; and this is a game that Dell is best at. He insists that component pricing and supply is not the key factor to Dell’s success; it is the Dell business model of going direct and cutting out multiple tiers of suppliers and multiple channels to market.

Rollins said that the US makes up 36% of global PCs consumed, and that in Europe (29% of the global market), Asia Pacific (19%) and Japan (9%) and South America (7%) Dell only has respective market shares of 12%, 6%, 10% and 11%.

Effectively it has a mere 10% aggregate grip on these markets which absorb 64% of the world’s PCs, instead of the 31% grip it has at home. And all it has to do is steadfastly eat market share towards its US number, to continuing on its wild and crazy growth curve. It also needs to repeat the performance on its recent product introductions in storage networks and printers.

Rollins said this will happen because of the company’s approach to operating only in standardized, low-priced markets. He pointed out that since 1996 when Unix and proprietary systems dominated the world’s server installs with 75% market share, Unix shipments have fallen consistently and now represents only 25% of servers shipped, versus the huge climb in Windows and Linux, with Linux shipments doubling in the last three years.

Rollins also gave hard and fast reasons for Dell’s recent decision to focus only on 2-way and 4-way Intel based servers, saying they are 89% faster than equivalent risc systems, and 79% less expensive, and that Oracle on Dell versus proprietary systems were 42% faster on a 2 processor Windows machine, and 89% faster on a 4 processor Linux machine.

And Rollins claimed that more and more large symmetric multi-processing machines will lose ground against smaller boxes with 4 or less processors, noting that these smaller devices, where Dell operates were up 19% in Q2, and larger systems were down 17% in the same time frame.

Also, Dell’s new markets are working out, according to Rollins, with early successes in projectors and PDAs and networking devices, and the company performing ahead of plan on printers.

One market which Dell confirms is no longer in its future roadmap is mobile phones. Rollins confesses that Dell probably couldn’t do anything that Nokia isn’t doing already - but the company may instead make a low number of communicating PDAs, if customers asked for them. Previously it had announced plans to produce a phone based on a Microsoft operating system next year.

© Copyright Rethink Research Associates 2003

Related Research
Get the News IS Weekly Newsletter, click here

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
Intel, Cisco and co reveal PLANS to keep tabs on WORLD'S MACHINES
Connecting everything to everything... Er, good idea?
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Oracle hires former SAP exec for cloudy push
'We know Larry said cloud was gibberish, and insane, and idiotic, but...'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.