Dell Bets Its Future Lies in Business Computing

Michael Dell has described his proposed $24.4 billion leveraged buyout of Dell as the best way his company can buy time to move beyond bare-bones PCs and into the $3 trillion market for services and products such as servers, network switches, storage gear, and software. “Dell is really evolving toward the ability to provide end-to-end solutions for our customers,” he told NPR on March 11. Trouble is, IBM has already made that transition, and other competitors are further along, including Hewlett-Packard, Oracle, EMC, and Cisco Systems.

In the iPad and smartphone era, Dell’s core business is fading. Desktop and notebook PC sales fell 8.2 percent in the fiscal year ended Jan. 31, including a 20 percent drop in the fourth quarter from a year earlier. Dell’s model is so broken the company plans to downplay build-to-order PCs, the signature innovation that helped make Dell the top-performing stock of the ’90s. PC group Vice President Sam Burd says his unit will soon encourage customers to choose from a handful of preconfigured models.