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Last week I was up in Austin on a trip and had the opportunity to see how much Dell’s hardened PCs have improved. For some time, Dell had seemingly been approaching this segment almost like Apple did AppleTV, more like a hobby, but recently it has begun to resource the effort more adequately.
Currently Panasonic dominates this segment, and Dell is a very distant second. Both companies have high-quality products, but they aren’t even remotely the same. Dell is massive and arguably, now that it has acquired EMC, the most powerful tech company in the world. Panasonic is huge as well, but most of revenues come from either larger industry or consumer electronic products. It really only crosses Dell with the Toughbook. In fact, if it weren’t for this one segment, these two companies would more likely have overlapping customer/vendor relationships rather than competing relationships.
This should make a simple SWOT analysis much more interesting.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. You do a SWOT analysis as part of a strategic assessment to figure out, hopefully before your competitor does, what your relative advantages and disadvantages are and optimize resources. It is rarely used alone, and it is typically created as part of strategic briefing to senior executives in order to help them focus on the most effective offensive and defensive priorities. They can then decide to fix the areas where they aren’t competitive, to better leverage the areas where they are, and to better anticipate coming threats that have been hidden under an ever-growing wave of tactical information.
Dell: Dell is arguably the most powerful IT vendor in the market. This gives it an unmatched set of global resources for both supply chain management (assuring low cost and fast time-to-market) and control systems that can better anticipate and respond to industry threats and problems. It has recently implemented a far stronger design influence, making its products relatively attractive, and its supply chain capability is believed to be second to none. Its large laptop line allows Dell to enjoy lower component cost and reuse some assemblies, providing additional cost advantages.
Panasonic: Panasonic dominates the hardened laptop market. This is a very low-risk market given that Panasonic has an almost unassailable position. In my opinion, it has the strongest brand in Toughpad and the deepest line of products ranging from large form factor laptops to hardened tablets and smartphones. It also markets its solutions relatively effectively, which has allowed it to resist competitive incursions from a variety of challengers, most of which have had to abandon this market. Panasonic is the leading expert on this segment, and this, combined with its market dominance, makes it very difficult to displace.
Dell: Dell’s line is relatively limited. It lacks a hardened brand, making it difficult to advocate the product and, outside of Dell accounts, has trouble competing effectively. Dell’s size can lead to a lack of focus, so it sometimes can’t bring all of its resources to bear. There is no apparent advantage for this segment to merging Dell and EMC.
Panasonic: ToughBook is arguably the more powerful brand in this segment, so there isn’t much uplift from the Panasonic name. Panasonic isn’t seen as an IT vendor, and this is the firm’s only PC product, making the firm vulnerable to blended IT bids. For a PC vendor, its volumes are relatively modest, adversely impacting component cost. The use of plastic-silver on the product has a tendency to make it look cheap, which works against its premium price in a user-driven spec.
Dell: Dell’s channel allows for broader market access, and with increased focus on military and police actions, there is potential to move this product into a far broader market using advocacy, much like the Hummer surged post Iraq (but without the gas mileage penalty). This product could be positioned for an emerging IoT segment, in entertainment for reality TV or live performances, and it could become somewhat of a status symbol much like Swiss Army Knives, Jeeps and Hummers were. It also could be a strong part of a military or law enforcement end-to-end infrastructure play leveraging Dell’s support and services.
Panasonic: In a world increasingly concerned with security, there is an opportunity for Panasonic to partner with a security vendor and position its product line as a stronger security solution. Toughbook has a powerful brand, and tied to a robust personal security message, a properly targeted product could be the darling of those wealthy enough to afford one and concerned enough about security to demand a better solution. In addition, with the advent of wearables and Panasonic’s willingness to explore broader lines, there is an opportunity for a hardened wearable targeted at specific verticals that are currently using Panasonic’s hardened mobile devices.
The threats are pretty much the same for both vendors as the overall market is exploring broad AI-based technologies ranging from consumer products like Amazon Echo to transportation products like autonomous cars. This is putting a lot of pressure on the PC market in general to evolve, and the military in particular has been exploring alternatives to hardened laptops which could, if successful, force a broad rethinking of what exactly is needed in most of the existing markets. Neither Dell nor Panasonic appears to be on the cutting-edge of this change, suggesting both could be caught by surprise if another implementation and form factor suddenly emerged. The advent of body cameras, wider use of drones, and the continued short-staffed nature of both the military and law enforcement suggest we are on the brink of a major technological change in this area—and one that could catch both of these vendors by surprise.
A New Direction for Rugged Computing
Every time I see one of these hardened laptops, I wonder if the entire market shouldn’t have gone in this direction instead focusing on creating machines that are exceedingly thin and light. Our jobs depend on these things working, and yet too often they don’t. Hardened laptops tend to be far more robust, far more secure, and far more usable outside—where many of us would like to spend our time rather than under life-sapping fluorescents.
Both Dell and Panasonic remain very active in this segment, each with their own advantages and disadvantages. However, I expect this segment is well overdue for a change, and that change will likely happen outside of either firm’s influence. Fixing that should likely be a bigger priority for both.
Photo courtesy of Shutterstock.