Michael Dell's new focus
As the New York Times' Steve Lohr reported recently, Dell has suffered a series of setbacks in recent months, from HP overtaking the company as the largest PC seller to an SEC investigation involving falsified quarterly results. In the article, Dell said, “We’re moving the needle in terms of getting focused on the right long-term issues.”
During a press conference after the introduction of a new storage device, Michael Dell was asked about how he can focus on long-term issues and satisfy the shorter-term expectations of Wall Street.
"What you see emerging is a bit of a different focus," Dell said. "We are pointing the company in new areas--enterprise, servers, storage and services. We are making a lot of longer term investment like this project [the MD3000i] and the Silverback investment [a service delivery platform acquired earlier this year]. We are building capability for all customers all around simplifying IT. It's a unique position for Dell and resonates well with customers. You'll see us do a better job of balancing short medium and long term all together."
That said, it's hard to make a case that simplifying IT is going to significantly differentiate Dell from HP, IBM and others delivering solutions to businesses, but it's the right direction.
Dell was asked if he were a $60 billion CEO. He first became CEO of the company when it had $3 billion in sales, in 1992, and stepped down in 2004. He returned to the CEO job in January this year.
"Are shareholders get to vote on that every year and we'll see what the vote will be. I feel confident I can led this company now and in the future," Dell said.
He also noted that in the last five or six years, Dell was one of six companies ever to roughly double its sales--from $30 billion to $60 billion.
In the second quarter enterprise revenues grew 19 percent, which was more than competitors, Dell said. "The business is doing well and the world is moving toward x86 servers in virtualized environments," he added.
Dell also highlighted the industry solutions group, which makes servers for other company (like Google's search appliances), and DCS (Datacenter Custom Solutions), building data storage solutions for the mega-vendors as fast growing parts of the business.
Regarding Acer's acquisition of Gateway in the consumer space, Dell said, "We've got lots of running room to grow. We are sort of just entering the channel and as we have talked with global retailers around the world, in most countries around the world our share in consumer is 10 percent of what we have in the commercial area. We are comfortable that we can grow that even in this new phase of consolidation."
Regarding Apple's strength in notebooks and how the company will excite customers for the upcoming holiday season, he said, "We have to apologize. We might have excited them to much. Our demand is exceeding supply and we have to catch up."