Dell posted decent results for second quarter earnings on Tuesday, but its outlook for Q3 2011 is disappointing.
If the Round Rock, Texas-based computer maker has been forced to drop its revenue expectations from 5 percent to 9 percent down to between 1 percent and 5 percent, obviously something is wrong and Dell needs to rethink its priories.
Speaking during the company's quarterly investors call on Tuesday, chief financial officer Brian Gladden spoke a bit about the "ongoing shift to higher value Dell technologies."
We continue to eliminate lower margin business that's not strategic to the Company long term. Specific examples of this include exiting lower value reseller business in both storage and software as well as unfavorable retail and reverse auction deals in our client business.
More specifically, Gladden said that the U.S. consumer market "has been weaker than we expected." Much like Cisco, Dell appears to be making a major move to redirecting more of its focus and resources towards enterprise clients.
Brad Anderson, senior vice president of Dell's enterprise solutions, explained some of Dell's enterprise strategies, breaking them down into two key areas of focus:
First is next generation computing solutions and architectures that address key customer needs, solutions that are easy to implement and manage, that address physical and virtual management holistically and extended adoption for key technologies by packaging the right functionality and intelligence to drive ease-of-use.
The second key area of focus is intelligent data management, which is developing an architecture that unifies storage subsystems both block and file and alters advanced functionalities that can be used across them and across the data life cycle. By coupling our unified ark with our intelligence policy, we can dramatically simplify and automate data movement and access while optimizing cost.
None of this means that Dell is abandoning consumer products altogether. After all, CEO Michael Dell still iterated his company's interest in Android as well as Windows 8-based tablets.
Nevertheless, consumer goods have continued to bleed most companies dry this year. If axing of the Dell Streak 5 is any sign, Dell has realized that it needs to trim some excess (read: unprofitable) products if it wants to keep posting earnings instead of losses and boost its outlook back up.
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