Dell: Long live the PC
May 22, 2014: 9:35 AM ET
PCs may not be a high-growth market, but they're still important to Dell's
customers, especially small and medium-size businesses, Dell's CEO says.
Michael Dell at Fortune Brainstorm Green. Photograph by Stuart
FORTUNE -- Michael Dell's year-long battle to take his company
private was one of the fiercest business brawls in recent memory. The
chairman and CEO of Dell managed to rebuff activist investor Carl
Icahn's takeover attempts before shareholders approved the $25 billion
buyout last September. What might be even harder for Dell now is
figuring out what to do with the company,
results prior to its privatization showed earnings of
25 cents per share, down from 50 cents a year earlier.
Nonetheless, Dell wanted his business back for a reason; he has a
vision for the company he founded in his dorm room 30 years ago, and
at the Fortune Brainstorm Green conference earlier this week,
he shared his plans about the company's future.
Here's an edited excerpt of our chat:
Big question here: Now that Dell is once again your baby, what do you
have planned for the company?
We have been for the last five or seven years growing our business
around creating end-to-end solutions for our customers, and that
really involves more than what we started with, which was hardware.
We've built a more than $20 billion business in new areas of software
services, data center, security and we continue to invest in those
areas. And what that does is it allows us to solve a much broader set
of problems that customers have and opens us up to a much larger
With such a focus on software and services, where does the PC fit into
your business model and do you ever foresee it not being a part of
No. It's hard to provide end-to-end solutions if you don't have both
ends. We're number one in commercial PCs in the United States and this
last quarter our share in the business grew faster than at any time
since 2006. That market may not be a high-growth market, but it's
certainly important to our customers, especially -- small and
medium-size businesses. It used to be that if you had IT in any
serious way you were a big company because it was expensive, but it's
gotten much more affordable. In the U.S. that's sort of empowering in
tens of millions of small- and medium-size companies and Dell serves a
very high percentage of those companies and has for many years. Their
needs start out as, 'Hey we need some tablets we need some notebooks,
we need some desktops.' That's often a way for us to introduce
ourselves to that customer and then expand that relationship to a
broad range of things.
Earlier this week,
Satya Nadella and Surface Computing head Panos Panay said
the laptop-like tablet will kill the laptop in the traditional sense.
How do you respond to that?
I think there's been some reconsideration that has gone on among
customers. They've said, 'A tablet may be great, but does it really
replace the productivity device that I use?' For some people maybe it
does, but for most of them not really.
How has Dell's tablet performed?
From the first quarter of last year to second quarter our tablet sales
doubled and then from second quarter to third quarter, they doubled
again. Then they tripled from the third quarter to fourth quarter. The
fastest growing categories of tablets are Windows and Android, and
we're in both of those.
Speaking of tablets, how do you see Dell fitting into today's mobile
landscape? Will we ever see the Dell cellphone?
I think you sort of have to step back and ask a fundamental question
of do you want to do everything for every customer, every time,
everywhere? It's probably not the best strategy so we choose to be a
bit more focused. Phones are exciting and shiny but if you look at
that business, there's no shortage of competitors so let's go do some
other things. We're investing much more in software, security, data
You've said Dell is doing well. Can you provide any top line numbers
that give more insight into how the company is performing?
We've seen data from large integrated IT companies so far this
quarter, and I can say definitively that we're the fastest growing of
all of them. Business is growing. Cash flow is strong.
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