Dell: Services firms want to work with us

Michael Dell insists his firm is changing

Dell: Time for change

Dell, though radically different from 10 years ago when the runaway success of the direct sales model saw revenue increase rapidly year on year, is still primarily a hardware supplier with added value services.

This is perhaps not a problem if annual revenue of $61bn (£31bn) in 2007 is anything to go by, but company founder and recently-reappointed chief executive Michael Dell says that the company has to change.

He is adamant that Dell is not turning into rivals IBM or HP, despite its leaning towards retail and channel sales and greater emphasis on offering services.
“There are some similarities, but Dell sells more PCs and servers in terms of unit volumes, and not as many mainframe and server-based services as online software-as-a-service and on-demand type subscription services,” he told Computing.

The company’s services model is estimated to bring in about $7bn (£3.5bn) a year in revenue, but Dell is unconcerned by the prospect of the HP-EDS services giant just around the corner.

“There are lots of customers in the services space -­ including Accenture, Atos Origin, Infosys, CSC and Tata ­ which hold 97 per cent of the market,” said Dell. “We have always partnered with those companies and in light of the HP-EDS deal, they want to work with us even more.”

Dell has shed up to 7,000 staff over the past 12 months, despite increasing its total employees via the acquisition of companies including storage area network specialist EqualLogic, email management firm MessageOne and IT services company Everdream in the same period.

The company has targeted $3bn (£1.5bn) of annual cost savings by 2011.