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Dell’s PC Future

Last week I attended Dell’s analyst conference and one of the best attended sessions covered PCs, services, and software. I’ll focus on Jeff Clark’s coverage of PCs since he was first up. Dell clearly believes that not only aren’t PCs dead, they remain strategic to the company’s mission. They opened with the argument that PCs […]

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Rob Enderle
Jun 4, 2013
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Last week I attended Dell’s analyst conference and one of the best attended sessions covered PCs, services, and software. I’ll focus on Jeff Clark’s coverage of PCs since he was first up.

Dell clearly believes that not only aren’t PCs dead, they remain strategic to the company’s mission. They opened with the argument that PCs represent a 1.5 billion unit installed market, most of which is currently on outdated hardware and software. Of this 1.5 billion, about half are in businesses. Dell, which has implemented analytics heavily to better understand and manage employees, customers and partners, knows that the majority of their new customers arrive through a PC purchase initially, and that makes the PC the major component of their business growth. That’s also why they aren’t giving up on it anytime soon.

This doesn’t mean they are happy with their sales performance—they aren’t. And they plan to make some significant changes to their business.

Simplification

One of the major strategic efforts that you will see from Dell this year in the commercial space is to simplify their offerings and lines. Apple has set the bar on fixing this problem. But most of the technology industry has been slow to learn that fewer can be better because it allows the company to focus and put more marketing budget on individual products.

This doesn’t mean Dell won’t have market-specific products. They actually plan to have more of those, using the analytics they are capturing from customers to better target these products to specific identified customers and needs.

More Use of Channel

I met with the Dell Channel team while here, and this group, which represents about a third of Dell’s sales today, is growing in the high double digits. This is largely because they have applied these same analytics to this critical part of Dell’s ecosystem. This allows them to spread their reach. With this kind of growth, it is likely that in the future most may eventually buy product through a Dell partner and not Dell directly

But this also suggests the channel will have input into future products and that some of the largest partners may eventually be able to get configurations that are uniquely theirs. This last appears to be a longshot now. However, it is the natural progression of a process that increasingly captures the unique wants and needs of channel partners, given that one of those needs is to have a unique advantage against other channel partners.

Dell already makes over $1 billion on embedded PCs sold to special resellers who use these specialized systems in medical, manufacturing or other PC-driven products.

Weight, Design, Price

Three areas where you’ll see Dell double down is on the weight of laptops, their design and competitive price points. On this last, historically there were a lot of commercial businesses that Dell passed on. Apparently, Dell is going to reduce costs aggressively on targeted products so they can compete at all critical price points.

In design, expect to see thinner products more aggressively using carbon fiber both to make the product more modern and attractive and to make them far lighter. Overall, with laptops, Dell will have thinner designs, more aggressively priced and bid, that will be far lighter than what they have in the market today.

Better Consumer Products for Business

Dell accepts that BYOD, which they believe has quickly grown to about half of the products used in business, is a critical trend. They appear to be focusing on making their consumer PCs better anticipate that they will eventually go into business. Expect them to create future consumer products that better fit in to business management tools and comply with business security policies.

Wyse is a part of this strategy with the idea of using some of their thin client technology to better provide a business experience on any consumer devices but especially Dell’s. Dell believes that the consumerization of IT is real, that to stay in the PC business you have to do both consumer and corporate products and that, long term, it may be harder and harder to tell the difference between the two.

Given there is less and less separation between work and personal time, I guess it just makes sense that, over time, there likely will be less and less difference between consumer and business PCs.

Wrapping Up: PCs Are Still Strategic

Jeff Clark, who runs Dell’s PC unit, clearly isn’t giving up on PCs. In fact, to the contrary, Dell is tightening up their product lines, advancing their designs to embrace new materials (carbon fiber), and they are not only not fighting BYOD, they working to make it easier to do securely.

As I was finishing this article up, they showed a clip of Dell Pro Support, showcasing some of the more difficult calls. In these instances, technicians had to find creative ways to get to very remote clients. The travel solutions ranged from tiny private planes that could fly into snowbound Alaskan terrain and mules that could be ridden into remote Mexican mining sights.

The core Dell message is that they’ll do what needs to be done. It was a powerful message because when folks’ PCs are broken, they don’t care how hard it is to get to them, they just want them to be fixed. If Dell can deliver this kind of service and customer focus to the PC segment and if PCs can be brought back, I believe Dell will be one of the firms that make it happen.

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As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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