Dell was clearly feeling their oats as their financials were trending positive and they were showing progress in most segments. However while the financial analysts had their own focus the industry analysts were taken to meet with Dells superstars and some of the stuff we found out is little known.
Plenty of us who cover technology have Dell as a client and Im no exception. Ive actually come to know and admire Michael Dell personally as one of the few approachable and candid CEOs in this segment.
Often we dont realize that companies can change in ways people cant by replacing the parts that make decisions. None of the major companies are the same as they were 10 years ago. And they were different then from what they were 10 years previously. That is part of what was made clear to me last week.
Dell is having a tough week as a lawsuit was filed against them for selling faulty computers 5 to 10 years ago. This was one of the things that resulted in Michael Dell coming back in to run the company and replace a large number of executives and fix a large number of problems.
Lets cover 3 of those executives this week. Ones building an entirely new business for Dell, ones focused on making sure the problems like the recent lawsuit dont recur and ones focused on improving Dells image and sales.
So I went to the meeting thinking that it was likely going to be a huge waste of time. It was anything but. Apparently, and few know this, Dell is the largest PC company building PCs for things like medical equipment, airline kiosks, in store displays, manufacturing equipment, gaming (both for video games in arcades and Las Vegas), and other embedded uses.
This is a market Id thought was largely dominated by little companies that build custom hardware integrated into this stuff. What Dell has been doing is taking over this market with standard PC component boxes at lower prices with Dell support that can be built into all of this equipment.
The end result is a massive amount of revenue and profit for Dell (they wont let me share the number but this business alone would put the company in one of the more lucrative technology categories) while their customers are enjoying lower manufacturing and support costs coupled with higher customer satisfaction.
The business is reportedly growing like crazy because no other large player has yet figured out the secret sauce of relationships and hardware to create true competitive challenge. This was like finding an incredibly revenue-rich and profitable company within a company. It amazes me that no one outside of Dell seems to have known about this until we were briefed.
This has to be one of the best-kept secrets in the industry.
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