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RSS feedsDell's moves to sell more servers, services, printers, projectors and PDAs are making the firm an all-round IT provider. With HP focused on integrating Compaq, many IT directors will see Dell as a more strategic IT supplier. Can Dell end lingering suspicions that it is just a jumped-up PC maker? Dell founder and chief executive Michael Dell this month met UK press to push the firm's ambitions.
First on the agenda was the question of Michael Dell's own future. Associated with his firm perhaps more than any other chief executive of a leading company, it is fair to ask about his personal plans. After 18 years of leading the firm, will he still be there in 18 years' time?
"I suspect so," Dell says. "I'm having a great time learning, growing. Again, I go back to Sam Walton [Wal-Mart founder who opened his first store when in his forties]. I'm 37 years old so I've still got a few years left."
Dell's plan is to grow the company based on industry-standard technologies - most notably Intel processors and Microsoft operating systems - without recourse to major acquisitions, and always based on customer demand rather than technological whims. "We have plenty of capital and we could do mergers and acquisitions," Dell says. "It's quite an exciting thing to do and quite fashionable, but we tend to be more rational. We can enter more markets organically through partnerships or small acquisitions. We have 4.5 percent market share in IT and we want to double that to nine percent in the next three or four years."
Dell believes that the much-derided PC industry can continue to part-fund his company's growth.
"You've got 500 million computers in use today and 180 million of them are four years old [or more]," he says. "There's quite a lot of opportunity for replacements and there's lots of growth [in regions such as] Asia, and in Europe which has a similar sized economy to the US but with half the number of computers."
Operating against type, Dell did make one acquisition of significant size when it acquired
storage area networking (SAN) specialist ConvergeNet in 1999. However, as Dell with typical frankness admits, that move was an error. "We learned something we should have known then that was pretty simple," Dell says. "Our business is based on industry standards. If we step outside of all that, we have technology for technology's sake. That's not what makes the cash registers ring."
Instead, Dell believes that organic growth of storage, servers, peripherals and services businesses will help to maintain his company's remarkable growth. In the past, Dell has dismissed many services operations as ways to create revenue rather than to offer real solutions to real problems. However, Dell insists the firm is not making a U-turn.
"There's a move to semi-custom services," he says. "If you look at service providers, Unix-to-Linux migration, SAN designs and Microsoft Exchange deployments, these are highly repeatable [services]."
Mainstream technologies
Dell's arch-conservatism makes the firm a good gauge of which technologies are likely to become mainstream, so it is interesting that the company is pursuing clustering and, finally, PDAs.
Dell plans to release its Axim range of PDAs in the UK in February. "We expect [the PDA category] to grow," he says. "If you compare it to [desktop] computers, it will be quite small [in total]. A couple of years ago some people were saying [PDAs] would replace PCs. Most people have realised they are really companions."
He is more enthusiastic about clustering, a way of assembling networks of servers so they act as the sort of immensely powerful computers that in the past would only have been available from the likes of Silicon Graphics, Cray or IBM. "We have scores of PhDs developing [clustering solutions] and we see it as the new supercomputer," Dell says.
But he is characteristically suspicious of technologies that have not translated to business sales. When one journalist says that he has seen a lot of interest in Linux on the desktop, Dell agrees with a droll, "So do we. We don't see a lot of them doing it yet. There's a lot of looking..."
Looking further ahead, some pundits have suggested that Dell's famed ability to control inventory and monitor customer behaviour could see it translate its business model outside of IT. But, as ever, Dell is circumspect.
"We've had plenty of customers who want to share business processes in supply and demand but for now our playing field is the $800bn IT market," he says. "We've got enough to keep us busy for a while."
Have your say: contact IT Week
ABOUT MICHAEL DELL
Michael Dell, 37, founded his eponymous company in 1984 with $1,000.
The company now has more than 38,000 staff and almost $34bn in annual revenue.
In 1992, Dell became the youngest ever chief executive of a Fortune 500 company.
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