31, 2014, 4:14 PM ET
Sees Advantage in Rivals’ ‘Chaos and Frustration’
founder and CEO of Dell Inc., says going private has helped the
company accelerate the delivery
of new products to market and make strategic investments for
customers. What isn’t clear is the extent to which Dell’s new focus on
cloud systems, services, and software are
resonating with CIOs.
Mr. Dell, in an Oct. 29 LinkedIn post
commemorating the first anniversary of Dell’s $24.9 billion buyout,
said going private freed up the company to focus on innovation. “We’re
investing in our strategy, revving up our innovation engine and having
a blast!” said Mr. Dell, who will meet with CIOs at the company’s
annual customer event in Austin next week.
has maintained going private would enable it to accelerate the
expansion of its business beyond PCs and enterprise hardware to cloud
systems, services and software. IDC market share numbers indicate
Dell’s PC business has had seven straight quarters of growth and that
its server business, which is ranked second in the market for x86
machines worldwide, remains strong.
difficult to gauge is the performance of Dell’s cloud systems, which
span the company’s enterprise hardware, software and service segments.
The company declines to disclose cloud sales figures. But
Dell is building private cloud systems with
Red Hat Inc. and is reselling public cloud software from
Google Inc. and
Microsoft Corp. Dell also opened a website where customers can
compare and shop for cloud software.
no doubt that the timing of Dell’s decision to go private was
propitious. Tech companies such as
Hewlett-Packard Co. and
eBay Inc. are breaking up, and
EMC Corp. is under pressure to do the same, as activist investors
demand higher returns.
IBM Corp. is
selling off its low-end server and
chip businesses. Mr. Dell may be right that the company is making
progress in private, although it is hard to have enough information to
say for sure, which is of course part of the appeal of being private.
Yet even if he is correct, it appears that Dell has some work to do in
communicating the value of those efforts to CIOs.
like Dell is doing the same thing as all of the other providers…
except they entered the market fairly late,” said David Chou, CIO of
the University of Mississippi Medical Center. Mr. Chou, who is is
evaluating similar software from Amazon Web Services, said he isn’t
considering Dell’s cloud systems because the company have enough
experience running health care software in the cloud.
cloud, security and analytics software doesn’t stand out amid products
other vendors are selling, said Gerry McCartney, CIO of Purdue
University. He is planning to attend Dell’s customer event, where he
hopes to learn more about the company’s strategy. “They’ve got to show
that they can handle a major transformation.”
Regardless of how well Dell is doing in private, it’s pretty hard to
imagine that things would be better for the company if it had remained
in the public market.
said that companies that break up their businesses to satisfy
shareholders “create chaos and frustration” for customers. That opens
the door for Dell to step in and earn new business, he said. “Every
move we make, every dollar spent, every new product and service…they
all start and end with what’s best for our customers,” said Mr. Dell.
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