Dell shifts away from PC business

The company is emphasizing business hardware and software instead of the personal computers it built its name on.

By Kim Peterson Feb 29, 2012 4:07PM
Image: Man sitting at dining table with financial advisor (© Corbis)The personal-computing space doesn't get any love these days. First Hewlett-Packard (HPQ) said it's thinking about getting out of the business -- only to change its mind later.

Now Dell has had it. The company "is not really a PC company," founder Michael Dell said at an event in San Francisco Monday. "It's an end-to-end IT company that really understands the needs of its customers."

That's an interesting turnaround for the world's No. 3 personal computer maker. Dell made its name selling customized personal computers on its website, and blew by Compaq to become the largest PC maker.

But oh, how times have changed. The PC market is in a prolonged slump, taking a toll on Dell and HP. Only Apple (AAPL) is coming out ahead here, and CEO Tim Cook taunted rivals last week by saying that "we are the only company that is innovating in the personal computer space, and have been for some time." Ouch.

Rather than duke it out with Apple in a tepid PC industry, Dell is moving into the far more lucrative area of computers, servers and other equipment for small and medium businesses. This week, the company unveiled a new lineup of servers and storage boxes that complement its in-the-cloud and data-protection services.

Hear Michael Dell talk about his new business strategy in the following video.

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The economy is roaring back, and businesses are willing to spend more now on upgrading their computer systems. Dell wants to be right there, competing with HP and Cisco Systems (CSCO) in technology infrastructure.

The company has been on this path for years, though it continued to produce personal computers at the same time. What may be new here, however, is that the company is being more vocal about its shift away from PCs.

Dell is also trying to position itself as a more advanced company than the one that cranked out cheap servers in the past. Now, it wants to be the complete top-to-bottom solution for any company -- a role that IBM (IBM) has perfected.

So get ready for the new enterprise wars, with Dell, IBM, Cisco and HP duking it out amongst a host of smaller rivals. Can Dell make it in this new world? Considering the damaged landscape of the personal-computer business, it doesn't have much of a choice.

3Comments
Mar 1, 2012 11:50AM
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wow, have the heard of ibm?  not to easy to knock them off.  large and in charge....
Mar 2, 2012 10:50AM
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I got a DELL Touch-Screen Computer & I HATE IT!! 

Worse computer I've bought & I'm going back to HP.At least they stand by there warranties & will help you get your computer fixed right.   Unlike DELL.. POS!

Feb 29, 2012 6:37PM
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Can Dell make it in this new world?  

Of course, they have a great brand name and a lot of respect in the IT halls.
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