Dell struggles as corporate post PC era looms: Is Windows 8 the savior?

Dell struggles as corporate post PC era looms: Is Windows 8 the savior?

Summary: Dell execs had an elephant in the room as they fielded questions about the company's first quarter earnings. The elephant? Apple's iPad, tablets and smartphones.

SHARE:

The corporate post-PC era may be arriving and Dell isn't happy about it. The wild card is whether Windows 8 saves the day for Dell.

Dell executives---CEO Michael Dell, CFO Brian Gladden and Chief Commercial Officer Steve Felice---had an elephant in the room as they fielded questions about the company's first quarter earnings. The elephant? Apple's iPad, tablets and smartphones.

Felice set the scene:

We are also seeing some IT spending prioritize to purchase other mobile devices. Now this is mostly a consumer dynamic that there is clearly some impact in areas of commercial as well.

In other words, the commercial PC upgrade cycle is skewing toward other devices.

Meanwhile, Dell is maintaining price discipline and walking away from PC deals that don't make profit sense. As a result, Dell's PC sales are taking a hit.

Gladden was asked whether the PC market is evolving away from the company's strategy. He said.

The growth in the PC market has clearly been lower than what we would have expected a couple of years ago. Clearly some of that is alternative mobile devices that I would argue is a relatively new dynamic affecting the business. There are still opportunities for us to find growth year. We see it as an attractive business.

Felice said there are multiple commercial PC wrinkles, but the business remains healthy.

In talking to the commercial customers, we still don't see in even the midterm any material change in their strategies. Other than maybe virtual desktops.

The big question is whether Windows 8 can save the day. CEO Dell said:

We are totally lined up around the launch of Windows 8. Corporations are still adopting Windows 7 so we don’t think there’s going to be a massive adoption of Windows 8 by corporations early on. Certainly the addition of touch capability into Windows 8 will be welcome.

How welcome? Certainly Windows 8 may save Dell's consumer business a bit. Dell added:

We think that the touch screen products will certainly cost more. They are more in the price points and price bands that we tend to operate in. We will have the full complement of products around the time of Windows 8. Unlike other Windows transitions, you generally are going to need a new PC whether it is a tablet or notebook with touch or some derivative hybrid. The product refresh cycle associated with this release of Windows is likely to be very different from other releases, but it is hard to know exactly what it looks like.

Topics: Dell, Hardware, Microsoft, Operating Systems, Software, Windows

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

207 comments
Log in or register to join the discussion
  • You guys really have to stop...

    There is no real mometum to replace Personal Computers with Tablets... Well, at least not in most businesses.
    slickjim
    • Tablets vs PCs

      I agree Peter. At least in my business tablets simply won't work. I need to connect to a variety of devices and network types which require specialized hardware and drivers that won't work period on any tablet. If all you do is browse the web and send emails they are great, but much more than that and a PC is really needed.
      ctleng76
      • Nonsense

        Sales forces are migrating tomtalets in droves. You guys remind me of the IBM exec who famously said rhe PC was just a toy. Luddites, every one of you.
        bobjones2007
      • The problem with your point

        is that more and more and more applications use a web browser for a client.

        Tablets won't replace PC's for lots of business users at least 50% or more. That said our entire sales team dropped their laptops last year for iPad's because we use salesforce.com. They carry an iPhone and a iPad. They had Dell laptops for years.

        I see iPad's used a lot, from people on retail sales floors looking up data, to my Honda dealer which uses them to check my car in when I take it in for service.

        To ignore their penetration is ignorant. Again they won't replace PC's for many but they are doing it for some. Those that a PC was the only choice at the time, but not the best one.
        JeveSobs
      • Tablets vs PCs

        How I agree with you! A tablet will never replace a desktop, or high end laptop. Drafting, design, electronic simulation, thermal analysis, and a host of other work related tasks require a real computer to get the job done.

        Yes, I have an iPad, and I like it, but for my real work, my dual monitor high end DELL is all that I use.

        I'm so sick of this post PC era talk!!!
        lloydkuhnle
    • Corporate America is not switching to i-anything anytime soon

      I work for a very large global corporation that orders Dell PCs everyday. Some employees utilize apple products for specific purposes but none takes the place of everyday work computers. Changing the infrustructure would be far too expensive. Home consumers may be flocking to apple but the PC rules the workplace. The iPad does not take the place of a desktop where I work. It lacks the computing power. Don't know about Windows 8 - but IT has worried about every new OS. I personally do not like touch pads - I hate the keyboards and I'd like to throw my iPhone out the window when I have to compose a long e-mail. If I have to work from home, I'd prefer to do it on my laptop - not an iPad.
      shiva1005
      • You miss rhe point...

        You talk about computing power in the age of the cloud, which will offload computing power from the desktop. And since your only experience with a virtual keyboard is on a phone and not a tablet, I understand why you hate them.

        "Sent from my iPad"
        bobjones2007
      • bobjones. Shiva is not missing the point

        IPad works nice for you. Great! But try for example to do virtual modeling or any other engineering task on an IPad.
        1ndy
      • Apparently your corp isn't ordering enough Dells...

        "I work for a very large global corporation that orders Dell PCs everyday."

        Apparently your "very large global corporation" isn't very large or Dell wouldn't be struggling...

        Fight that change!!! Don't embrace it!!! You go girl!!!
        i8thecat4
      • This 400+ workstation entity is abandoning PCs...

        ... and we're headed to virtual desktops (currently about half way there). Accessible from anywhere with credentials, a token, a browser and Internet access. Desks now have dual monitors and a small box (7"x4"x1") that has a keyboard and mouse plugged into it.
        ejhonda
      • Ah no.

        @bobjones2007

        What computing power are you talking about? An IDE? Or how about rendering some video? I thought not. Or maybe you thought you could do that 'in the cloud'?
        lj2009
      • Neither are SMB's

        We have about 20 towers and 20 laptops in use. Maybe, maybe 3 of the laptops can be replaced with a tablet. But, because we're a Microsoft shop, any tablet we purchase will be a W8 tablet. We're currently programming a new app that will run on an Iconia W500. This app will not be run on any existing laptops. We'll probably purchase 2 or 3 W8 tablets to use with this new software tool.

        FWIW - we have tested our DOS-based LOB app with W8 running on the W500. With a wireless mouse and keyboard, and a 22" HDMI monitor, the W500 does everything our W7 towers can do. But, we can pull the tablet from it's keyboard dock and go into a meeting. We have Office 2010 installed on the W500 and can do a PowerPoint presentation in the meeting. It has Outlook 2010 installed using an Exchange 2010 account. We can enter tasks, new appointments/meetings in Outlook. We can take notes in OneNote. We can wirelessly print from the conference room to our big Lanier MFP located in our copier/printer/plotter room. We can scan some documents using the Xerox MFP located just outside the conference room and have the scans wirelessly pop up in PDFXChange Viewer running on the W500. Once the meeting is finished, we take the W500 back to our desk and plug it back in it's keyboard/dock and its a normal workstation again. Back in it's dock, I Remote Desktop into one of our W2008 servers and add a new user. Then I Remote Desktop into our Exchange Server and do a little system maintenance. I'm done with the Windows servers. Next, I fire up the No Machines NX Client for Windows and log into my Fedora Core 12 server for some maintenance. Done with that I answer some email in Outlook. Update some system documentation in Word 2010. This documentation resides on a networked share. When done for the day I pack up the W500 with dock/keyboard and mouse only and head home. At 9 at night I VPN to the office and Remote Desktop to a W7 workstation that needs some software updated. Try that with an iPad.

        If Dell can produce a tablet like the W500 in the same price range, they should be able to sell a ton of the devices. If they can make a tablet like the W500 that can dock to the back of a flat panel monitor to provide a full desktop experience they'd create a new market. I don't think any one OS can be Dell's savior....they're going to have to figure that out on their own.
        mark.cooper1
      • RE: You miss the point

        Tell me I am missing the point when an iPad can truly multi-task, run with mutliple monitors, run full productive applications, and run software and hardware not locked into one vendor's ecosystem.

        You can talk about the cloud offloading computing all you want and if you want to put your trust in that then by all means. Many may still want to do their work offline on a computer where they can run programs in multiple windows and not have to work on a 10" or smaller screen.
        bobiroc
      • Useless Bluetooth on iPads and iPhones

        don't worry about engineering programs, just try to send or receive a file using bluetooth on ipad, or any iOS device, and you are stuck!
        Portable device - bluetooth useless. It doesn't JUST WORK like all other bluetooth devices in the last 15 years.
        warboat
      • and

        "Home consumers may be flocking to apple but the PC rules the workplace."

        The consumer market has been larger in terms of sales since 2003 for computers. Apple is laser focused on the consumer market. Their Enterprise offerings are a joke.....but I think they know that and don't care.
        JeveSobs
      • @bobjones2007 If I hear the word "cloud" again...

        I'm going to stick screwdrivers in my ears.

        The cloud (undefined and vague) is not the magical beast that is going to fix all of technologies woes. The latency over the internet is not going to change to light speed overnight, and unless we start breaking out some sci-fi technology, "the cloud" (ugh) is ALWAYS going to be slower than copper and silicon within micrometers of each other.
        thoiness2
      • @Bobjones

        The age of the cloud? The only way the "age of the cloud" will become a reality is when we have reliable nationwide wireless coverage that will do fiber speeds, reliable cloud security, and transparent accountability for whoever is storing your data. No reasonable business is going to send their information off into the cloud until then.
        dsa791
      • YOU miss the point, Bob

        bobjones, you can't offload rapid response in manipulating a 3D model to "the cloud". You could potentially offload a long running process like non-interactive 3D rendering, but when you need the UI to update the full screen in real time, cloud computing can't do it because that type of computing has to be local for immediate, real time responsiveness. Web forms are good for... forms... entering data in fields, hitting a submit button, waiting for a response... but not all software is form based. One day tablets will have enough local computing power to match today's PC needs, but when that time arrives, PCs will be that much more powerful and we'll have the same issue again.

        Touch is not a replacement for all forms of human-computer interaction that exist on desktops today either. Not everything can be done efficiently with "touch only" devices with no tactile feedback. For example, I wouldn't have bothered to have typed this response on a clunky iPad UI. But, since I have a real, physical keyboard, with real, tactile feedback, I can type rapidly with minimal error and minimal effort compared to what I could do on a flat, glass surface, so it's worth my time to type it up on a desktop, but not on a touch screen.

        BTW, I have experience on touch keyboards on tablets and I hate them there too.

        "Sent from my 3.2Ghz Quad-Core, 12GB RAM, 5TB HD, 30mb hard wired networked, 32 inch 2560x1600 desktop"
        Software Architect 1982
    • Missing a couple factors ...

      Peter, ctleng76, and shiva1005 - While I generally agree that PC's are not disappearing from the landscape anytime soon, the shape of the PC is forever altered. The market is stratifying into two bands: Those who "produce" content and those who "consume" content. If you work in Excel 6+ hours a day, the chances of you doing your job with an iPad and ditching a PC is approximately 0%. However, many managers simply tussle with e-mails, use web apps to "approve" of changes or get status on projects, and can generally get through their day on tablet devices. If your company introduces a virtual desktop technology and your tablet has an option for keyboard, suddenly your "need" to have a Windows PC is considerably lower.

      I need a PC. I do real work. But I also know that not everyone is me - and not everyone is you. My guess is that you guys will need PC's forever. That isn't necessarily true for everyone. What is unknown is where that lands as a percentage. Is it 25% of today's PC users that can be satisfied with tablet devices or tablets-as-thin-clients? Is it 50%? Is it more? No one knows since we are just at the dawn of this era. HP bet badly on cloud a couple years ago and spent two years in hustle-mode recovering. You can bet that HP and Dell are watching the tablet wars wishing they had something at play. The TouchPad was cool, and if it had been first, they might have had something interesting. Instead, both Apple and Google had entrenched market share by the time it hit stores and it ended in disaster. Is Windows 8 the answer? If HP and Dell are to play in that form factor, they best hope so. Windows Phone 7 is cool, but no one is buying. See TouchPad and WebOS, right? There's a LOT of subtlety that goes into these small platforms and without the right mix, a product is DOA. Samsung is "getting it." Apple is "getting it." If you are anyone else, well, good luck ...
      zaq.hack
      • What is this "real work" that you do?

        Are you saying it can't be done on a computer with a smaller form factor when said computer (tablet) is running on a more stable platform (iOS or Android) accessing a server in the cloud (offloaded processing power, hosting your application)?

        I am stunned at some of the comments on this article. Substitute OS360 for Windows in this conversation and it could be taking place in 1985.
        bobjones2007