No. 15: Charging back to the front

Dell Inc. had a challenging year in 2007 asit made several strategic moves to beat backthe competition by adding service-providercapabilities to its offerings as a computermanufacturer. Although in a transition period,Dell recorded $1.7 billion in governmentsales and secured the No. 15 spot on thisyear's Top 100 rankings.To bolster its services capabilities, Dellmade several acquisitions, including ASAPSoftware Inc., of Buffalo Grove, Ill., aprovider of software solutions and licensingservices. The computer giant also purchasedEqualLogic, a Nashua, N.H., provider ofhigh-performance storage-area networksolutions.Companies are bundling hardware andsoftware with services because customers wantefficiencies, said John Enck, research vice presidentat Gartner Inc. "Dellhas recognized that in orderto be competitive in themarket going forward,they've got to really reinvestin solutions. That's whythey made a lot of theacquisitions."In another move,Chairman Michael Dellreturned for a second stintas chief executive officer to lead the reorganizationand stem Dell's year-long loss of marketshare to rival Hewlett-Packard Co.Despite the challenge from HP, Dellremains the No. 1 provider of PCs to the government,said Shawn McCarthy, researchdirector of government infrastructure optimizationand vendor programs atGovernment Insight, a division of IDC.He said their competition often comesdown to price and availability."Sometimes availability can be anissue when you're talking about hundredsor thousands of PCs," McCarthysaid.In another strategic move, Jim Duffeyjoined Dell in December as vice presidentand general manager of the PublicBusiness Group, which includes the federal,state and local, education andhealth care sectors. He left EDS Corp.where he had led that Top 100 company'sgovernment services business.Within three months of his joiningDell, the government group wasrestructured.The federal sector now focuses onproviding the homeland security andintelligence agencieswith laptop and desktopPCs, servers, and storage,Duffey said. Othergroups are devoted to thecivilian agencies; DefenseDepartment; systems integration;state, local andeducation; and health caremarkets.Although it's too early totell how well the new alignment is working,Duffey said, "indications are they will haveaccomplished more in covering the marketplacethan was covered before.""Customers are grappling with the challengeof trying to do a lot more with less: less moneyin their budgets and fewer people," Duffey said.He said that as a manager, his challenge isto ensure that his sales teams find new customersand markets and are adept at sellingDell's new products. "I think that opening upthe organization in this way has allowed us toaccomplish that."Duffey said he couldn't say how active Dellwould be in the mergers-and-acquisitionsmarketplace this year, adding that he hasseen indications the company is not lookingfor major acquisitions. But he wouldn't ruleout smaller niche buys."It's clear that the senior leadership is targetingniche areas where we can expand ourfootprint around the products that Dell hashistorically provided," he said.