Feeds

Middle man: Dell expands on growth plans

Smart phones and tablets for biz

The Essential Guide to IT Transformation

Enterprise systems and support are key to Dell's growth and profitability, but don't think that the company is going to abandon the PC business. Like HP and Fujitsu, Dell knows the PC is the foot in the door at many small and midsized businesses, and with more than two billion interactions with customers since its founding, it says it knows how to keep those customers happy as they grow and make them Dell IT shops as they do.

That said, Dell does have its eyes on other revenue and profit opportunities according to the CEO who presented the chart below.

Dell growth opportunity

Dell's growth chart: revenue on the X axis, operating income on the Y

The next generation computing and intelligent data management bar is all of the stuff Dell wants to wrap around new servers and storage, including systems management software and appliances, modular data centers, networking and so on. As you can see, the revenue and profit potential here is considerably larger than Dell currently gets from servers and storage. Dell also thinks it can carve out a very profitable application software services business, running software on clouds for customers, and has its eye on selling smartphones, tablets, and related security and data services for them to enterprise customers.

But Dell is still very bullish on PCs, as it is on servers and storage. "The end of the PC era is over-hyped," said Jeff Clarke, who run's Dell's client business, in his presentation at the analyst day. As it is doing in servers, Dell's PC business is evolving from being strictly a hardware business to one that provides services for myriad kinds of devices. The chart below shows, how Dell sees the client business.

Dell client market

The client is no longer just the PC, in Dell's view

PCs may only rise at a compound annual growth of seven per cent between now and 2014, but that's still a $320bn addressable market – nothing to shake a stick at, and something to chase in emerging markets for sure. If you sell the desktop and notebook to an SMB shop in India, China, or Brazil, you'll probably sell the server if the PC isn't crap. Dell wants to sell smart phones and tablets to these customers, too. And perhaps more significantly, Dell expects 75 per cent of the revenue growth and 85 per cent of the unit growth opportunity for client devices of all types to come from emerging markets.

Clarke was not about to pre-announce products at the analyst day, and did not say what Dell's plans were for ARM-based notebooks, but he did concede "we're going to see ARM processors on notebooks, clamshells, or whatever you want to call them" right alongside devices using low-powered Core and Atom chips from Intel.

The issue, said Clarke, is that smart phones and tablets have trained us to expect a device to be always on, always connected, thin and light, with a day's worth of computing battery time.

As for Dell's plans for smart phones and tablets, Clarke merely said that Dell would be focusing more on integrating devices with services – such as data storage and security – that would appeal to its commercial customers and shy away from strictly consumer devices that have been launched by vendors to date.

That's an interesting idea, but it may turn out that companies will want something that looks a bit more consumer like from here on out. The app catalog is the computer, after all. ®

Boost IT visibility and business value

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.