Dell sharpens focus on solutions
- By David Hubler
- Jun 13, 2012
“Dell is an end-to-end solutions provider today as we continue to build out our data center, software and services capabilities,” Chairman and CEO Michael Dell said at the company’s 2012 analyst meeting today in Austin, Texas.
Inside Dell's federal government strategy
"We have changed the conversation we’re having with our customers. We are a solutions company first, vertically focused, and creating more value for customers with innovative offerings that provide competitive advantage,” he was quoted as saying in a company news release.
Dell also announced the company’s first dividend of eight cents a share.
The company intends to continue shifting its mix of operating income to Dell-owned enterprise solutions and services that scale vertically and horizontally with customer needs to address both its largest and smallest customers, Dell said.
Evidence of Dell’s solutions transition over the past 12 months includes acquiring eight companies providing strategic intellectual property for Dell’s growth as a solutions provider, creating a software organization, and opening 11 customer solution centers globally, the announcement added.
The company also has doubled the number of its engineers developing enterprise solutions and more than tripled the number of its specialists selling solutions over the past five years.
The result has been a shift in Dell’s sales to higher-margin data center solutions consisting of servers, networking, storage and related software and services, the company said.
The world’s third-largest PC maker plans to boost revenue from data-center products and technology services 45 percent to $27.5 billion by fiscal 2016, Dell said, according to Bloomberg News. Over that four-year period, PC- related revenue will climb 8.3 percent to $47 billion.
“The new dividend will keep investors satisfied during this transition period,” Brian White, an analyst at Topeka Capital Markets, wrote in a research report cited by Bloomberg News. “Dell’s strategy in the enterprise market is moving toward greater focus,” he said.
Dell Inc., of Round Rock, Texas, ranks No. 19 on Washington Technology’s 2012 Top 100 list of the largest federal government contractors.
David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.