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Where Does Dell Go After Losing 3Par?
crimeandpunishment writes "It was the big deal Dell wanted in a big way. But now that it has lost out to Hewlett-Packard in the bidding war it started for 3Par, where does Dell go in its effort to diversify its business and move into the higher-profit area of selling technology to other companies? The company faces significant challenges, largely due to its lower-end focus, and because many of its competitors beat Dell into branching out. One analyst says, 'People see [Dell] as box-pushers'."
shut the company down and return anything left to the investors. Seriously. The assemble shitty computers and need secret intel cash to be "profitable".
Do you even lift?
These aren't the 'roids you're looking for.
Dell already has somewhat of an alliance with EMC. I'm not sure who would be getting the better deal out of a deeper alliance or even a merger, but the possibility exists.
If libertarians are so opposed to effective government, why don't they all move to Somalia?
How about Hell?
No, seriously. They have a huge cooling issue with the Data Centers Of The Beast down there. Go ahead, Dell. Go on.
you're not getting a 3par
Dear Dell shitbags: Optiplex GX270 fiasco you went to great lengths to hide which you're finally getting sued for. Enough Said.
"To err is human, to mod Funny divine."
and say unreservedly that Dell can go to hell.
and going back to their successful business model would be a good first step.
They're looking so 1990s, and a 20-year old image is never good in the computer business.
people don't see Dell as box-pushers, people see Dell as a company to avoid.
Leave my Wang out of this
There, fixed that for you. There's a few "caps" I'd like to put in Dell's ass, and they know the ones I mean because they have Dell's name on them already.
Dell can go to hell for all I care
-- Let us endeavor so to live that when we pass even the undertaker shall be sorry. -- M. Twain
Start by ditching the cheap PC market and focus on the server side. Maybe they can salvage themselves from their history of crappy failing cheapass desktops. Then again, they've already shipped out cheap chinese servers with built in firmware trojans, so there's probably no hope left for them.
A shame that the best thing dell brings to the table right now is it's computer configuration. Maybe they can sell that off to IBM and HP so we can buy servers online from them without having to struggle through their crap.
I finally see the company making long term plans, putting the customer first, focusing on improving our product line, image and most importantly our services, which have, for several years now, failed to live up to the standards of yesteryear.
I'm not buying stock yet, but I'm hopeful.
Let's put it this way:
Apple charges a lot more money for its products and they still sell a lot of them. It's not the price that makes Apple successful.
Dell built its business on customer support and service. While it's quality has more often been pretty good, it has remained more or less on par with its competitors. What makes them better is their support and service accessibility.
Sad thing is they started sending all their call centers out of the U.S. and they wonder why they started losing business? "Everyone else is doing it" was the wrong answer in the case of Dell. I remember when the change was announced. Many business customers started leaving Dell immediately before Dell did an about face on it. Still... they did it anyway... just slowly and quietly.
So, "so-so" to good quality, and a pretty decent online database for machines and a not-difficult means of getting device drivers and such.
If Dell wants to rally, they need to bring their support BACK to the U.S. That will be the only way they will be able to differentiate themselves. And if they cost a bit more, I don't think people will mind so much.
After losing 3com and 3par to HP, they always can try with 3M.
3Par is not worth it, HP is just being bully and want to get rid of the HD partnership so they can push their own storage.
For Dell and their customers this is a relief as they would have burned a lot of their cash reserves, now HP have. 3Par was impressive yesterday tomorrow somebody else will show how storage should be done.
They're making billions as box pushers, isn't that good enough?
There's no need to branch out, if you're good at what you do. Dells are not cheap, Dells are low quality. Except for the rare gem in the display section when there's a sale, there's no reason to buy Dell. THAT is Dell's problem.
Sorry SuperMicro, but you could use a bigger umbrella.
So, Dell: Buy SuperMicro
Also, Dell, you need to make some serious inroads in the backend service arena. There are several dozen cloud service and storage business starting up every week. Buy two or three of each. Three billion Dollars should go pretty far in this arena.
Split the software and services from the hardware. While you're at it, buy or invest heavily in implementation and sales engineer forces.
Once all the divisions are established, take some of the leftover funds and run a few Super Bowl ads around Dell Ver. 2.0, where directly offered services come with the requisite backing (whether cloud or otherwise)
Does "faces significant challenges" mean "Is no longer capable of satisfying the bloated expectations of parasitic wall-streeters because it basically just produces an unsexy commodity in quantity, like steel or potatoes" or does it mean "is seriously fucked because corporations will only buy if they can get a "total enterprise solution" from one company, by cutting a single PO?
The former seems like a largely perceptual problem. Earth to investors, not every industry segment can double its profit every quarter forever, and if it can, it is probably a scam. Civilizations are built on largely low-margin commodities. Cement, steel, sulfuric acid, corn, potatoes, x86s. Go find a Ponzi scheme if you can't deal with that.
The latter, though, seems like a real issue for Dell, one that could seriously impact their mid to long-term viability.
No. Their shareholders demand that Dell produce an ever increasing value to the company - forever and ever. They have to get bigger or the stock value will decline and the CEO's options will not be worth enough.
Alex, I'll take keybindings not used by Emacs for $400....
We are going 5PAR.
Fuck systemd. Fuck Redhat. Fuck Soylent, too. Wait, scratch the last one.
The problem with Dell is, that they were never big into R&D. Dells business consisted always of providing quality PCs with reasonable prices through direct (online) distribution. Not much invention here. It doesn't surprise me, that they lack the vision to invent something (r)evolutionary to differentiate them from competitors. IBM (Lenovo), HP, Apple, Asus, they all tried to diversify lately.
It's never been in anything before, why break a perfect record now?
Blank until
I buy Dell computers from the refurb market. They are cheap and plentiful. I love 'em! I have nearly 150 small form-factor systems and laptops. Because of the indecently low cost I get them, I keep spares on the shelf. I don't fix them, I just swap the HD to another box. The parts are easy to swap in and out and I have experienced a high level of up-time with all of my systems. GX150 were the first systems, then up to GX260/270/280. Now that those systems are leaving the refurb market, moving up to the GX520/620. There is nothing wrong with being a box-pusher. Someone has to make the boxes and that I will eventually buy off refurb.
Bearded Dragon
But for buying Dell? You'd might as well start cleaning out your desk before you hit the order button.
There's no -1 for "I don't get it."
There is nothing Dell can do, that another company cannot do better, whether it's top end cloud infrastructure, sophisticated software and servcies, top end personal hardware, or low end hardware. Dell no longer has a selling point, and it'll keep going downhell until it finds one.
They're making billions as box pushers, isn't that good enough?
If they paid dividends, maybe.
Since they don't, they are expected to grow. And grow they have not.
Technically, they've roughly doubled their revenue in the last 10 years, but their net income has been flat or declining.
If you are an investor, you have other choices in the growth game - like competitor Apple with their 10x revenue growth and corresponding net income growth. Or HP with their 3x revenue growth and significant net income growth.
They are being out-grown by their competitors. If they aren't in that game anymore, then they need to issue a dividend and compete for retiree money.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
I think Dell is more likely to continue its niche market expansion, looking at acquiring small players like Network Engines (ticker symbol: NENG), who already rebrand Dell gear (in essence, they buy into niche markets that get established for them by the smaller players). It's the area that Dell traditionally does best in.
1.They have little long term vision, but are instead obsessed with making the goals for the next reporting period.
2. The "executives" are a series of "wonder boys" that come in, discard everything that wasn't their doing, and re-invent the wheel with their brand on it. They usually are there long enough to screw things up and then get picked up by another company.
3. Middle management has a siege mentality, never knowing when one of these "wonder boy" executives is going to come in and fire them, replacing them with their buddies.
4. The actual workers spend a lot of time wondering what the hell is going on and who is in charge this week.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
No. Their shareholders demand that Dell produce an ever increasing value to the company - forever and ever. They have to get bigger or the stock value will decline and the CEO's options will not be worth enough.
Actually many stock options are crafted in such a way that any dividends paid will be treated as notionally received by the CEO and reinvested in stock, so this is not so much of a reason. A better reason is that public companies no longer believe in paying dividends. The rationale nowadays is that you own a stock in the hope that it will go up in price so you can make money by selling it to someone else... who will presumably be buying it in the hope that further down the line they can find someone else to offload it onto. It's the "Greater Fool" theory of investing - nobody buys a stock because they hope to get money from the ownership, they hope to make money by finding a "greater fool" than themselves to buy a fancy stock cert that is functionally just a piece of paper (or electronic equivalent).
There is nothing inherently wrong with a company retaining money for growth rather than distribution, it's just that it has become an idee fixe. CEOs don't want to start paying dividends because dividend-paying stocks are perceived as having limited growth potential. The reluctance to pay dividends leads to ridiculous results, like Apple and Google sitting on huge cash-piles larger than some Fortune 500 companies with no particular plans as to what to do with them. Still, the lack of need to ever raise new finance frees the Board from having to justify investment decisions to banks or investors.
Instead they do stock buy-backs to artificially increase the price of the stock - which only helps those investors who sell out, not those who continue to hold the stock. Or they go on "empire building" expeditions where they blow cash on wild merger & acquisition activity that is more about them becoming CEO of a larger empire than about building value for shareholders.
Look at the 3Par events. The final valuation is ludicrous at 325 EBITDA. Yes, what 3Par do is important to the future of IT. Yes, they will experience growth over the next few years. But this valuation already prices in an ultra-optimistic scenario. How can HP shareholders get a profit from this deal? In finance you take risks to earn rewards. I can certainly see a risk that 3Par will underperform, but how can it reward HP by overperforming? I just don't get it.
To create new products and innovate in markets you need Research and Development. You can't be a me-to follow on that wins with low manufacturing costs. R&D requires a different mindset and a whole new way of planning. It means risk taking but balancing the risk carefully with planing and strategy to correctly evaluate and drop things that are not going to work as well as properly spend on the high quality part where it is needed.
Dell's problem is its founding business model - mass-assemble PCs using standardization and volume to bring costs down - doesn't work on any of the new electronics markets.
As I see it, they either need to embrace their role as a builder of boxes ...
Dell's problem is that the novel and leading practices that they pioneered are now standard practices. They no longer have the manufacturing, assembly and distribution advantages they once had. This is one of the reasons they have been so eager to grow into new markets with new products.
Also prices have collapsed since Dell's glory days. Even with higher quality corporate oriented products Dell would still merely be selling "commodity" products at a low margin. Not commodity as in cheap stuff but commodity as in fairly indistinguishable from comparable products from other companies.
Sadly I think Dell is a little more likely to be on a Gateway-like path than an HP- or IBM-like path. Michael Dell's advice on what to do with Apple in 1997 may come back to haunt him: "What would I do? I'd shut it down and give the money back to the shareholders".
I believe they go into a room and high five each other, cause they just conned HP into paying an absurd amount of money for something they didn't really need.
Switch or Die, Dell. 5 computers isn't going to cut it.
Dell could go after Compellent... very similar to 3PAR. CML stock has almost doubled since the start of the 3PAR acquisition. Compellent has a very similar feature-set to 3PAR arrays and Dell could pick them up for about 750M.
Dell always was a low cost knock-off product. They were never innovators, and never developed a real R&D function in their company. They basically sold the same thing as the other guy, except for less money. The difference is that HP, IBM, and for a while, Compaq would create products that Dell did no have at all (there was a time where you could get servers from IBM, Compaq and HP, but not from Dell). Dell would wait until the component manufacturers would have the commodity parts (depending on market size that would be weeks, months or a year or so) , and then would bring a less expensive machine to market. For desktops, since Intel provided chipsets and reference boards, there was no lag, and often Dell was quicker than others to put the latest CPU in a desktop. HP, IBM and Compaq had to finance building machines in advance and shipping them to resellers. Dell would take orders this week, and make and ship the PCs next week. This practice worked in Dell's favor as components would drop in price, allowing them to lower prices faster than their "channel bound" competitors.
Ironically, the last of the big 80s and 90s PC makers is Apple, who has continued to invest in R&D, still has a big channel (even though they have retail stores) and is using their ability to create new products (iStuff) and/or superior products (Mac) to extract very healthy profit margins from a recession market. Dell wants some profit, but is stuck being the low cost leader and doesn't have the internal resources to fix the problem, and their friends in Redmond aren't exactly producing the electrifying new software that makes people want a new PC.
-- $G
Dell will get bought by Cisco. And the new Cisco will buy NetApp.
Dell should buy up all of of their Alienware's subsidiary's competition....Falcon NorthWest, Digital Storm, Velocity Micro, Origin PC, the whole lot. That way, they can corner the market on 6-12K gaming machines that those with far too much money on their hands who are far too lazy to build it themselves..
Is no longer capable of satisfying the bloated expectations of parasitic wall-streeters because it basically just produces an unsexy commodity in quantity, like steel or potatoes.
Wall street has no problem with low margin commodity type companies. They just expect them to describe themselves as one and to act like one, not to pretend that they are still a growth company when all that differentiated them has come to pass.
FWIW, this situation is a direct consequence of congress making laws in the early 80s that encouraged tying CEO compensation to stock price. They thought somehow it would fix things if CEOs got paid in stock instead of in cash. Now CEO compensation is so complicated, the laws surrounding it, you need a special consultant whose entire job is to figure out how to pay CEOs.
Many investors are happy to have a company that consistently pays dividends, and grows at roughly the same speed as the economy. In fact, that's a good stock.
Qxe4
Compellent (CML) and Isilon (ISLN) that has storage virtualization technology?
I would have hard time getting excited over a Dell-branded smartphone (or a Dell-branded anything else) but that's just prejudice. Smartphones have barely started happening, and nobody has been "beat to the punch" yet. There's only phone on the market which doesn't suck in a certain drastic, crippling in-your-face way (that phone is Nokia's N900), and that's just one one point of view, not to mention that "doesn't suck" is hardly a ringing endorsement. One "doesn't suck" on the market leaves plenty of room for someone to come along with "good" or even "kick ass."
Shit, you don't even need to get fancy/expensive with the manufacturing; right now most phones' problems have to do with the software. Most of the different phones' hardware all looks similar anyway and time makes a fool of anyone (and I'm not just talking about customers, I mean manufacturers too) who pays extra for the latest and greatest. Lowball it -- make the cheapest possible (within reason) hardware (surely Dell can pull that off!) -- and they just have to preload some carefully-chosen software which'll cost 'em nothing or nearly so. Just think about what users need instead of what carriers, governments, and "strategic partners" want, and you can be a leader. The users are still waiting.
There's so much remaining potential in smartphones that it can still be anyone's game. We still don't know who is going to come out with the first good phone, but there's no reason it couldn't be Dell, if they were to try.
How about taking the $1,500,000,000 they were going to give 3Par shareholders (to get 3Par and 350m cash) and give it to Equallogic engineers instead to design a 3Par competitor. Maybe tout for a few Google hardware people and wait out their non-compete but keep Equallogic in its current arms-length form to prevent Dellification of the final product. Why not boost R&D in the US rather than giving venture capitalists a pay day.
It's one thing when you don't have the cash or engineers to roll your own. Dell does.
*Disclaimer - the shop I work for has an Equallogic since Dell's buyouts. They are very proactive with notifications of new firmware etc. We are happy.
Oh man, I smell me some paid shrills. Dell has issues but lets look at HP for a second. HP just forced out their CEO. Not good. Then HP killed all server sales they were getting through Cisco. Cisco now exclusively sells IBM servers. They used to sell HP. Cisco is out for blood too with HP. They want them out of business. HP wants Cisco out of business. THAT is not going to happen. Cisco has the enterprise on lockdown. Then HP turns down business left and right. If they find out you sell Cisco or Dell they won't even partner with you.
Basically HP just locked themselves in the bridge of the Titanic and told the orchestra to keep playing as the ship sinks.
at least in my eyes is quality. i tell people to stay away from dell because all the hardware ive ever bought from them has broken down within 1-4 years.
insert funny sig here
HP built the platform to put that idiot in the United States Senate, as if that body didn't have enough problems.
One analyst says, 'People see [Dell] as box-pushers'.
Those of us who have been engineers for a while are disheartened to see Hewlett-Packard in the same light.. Dell has always been Dell, but HP was once truly a company worthy of respect.
The higher the technology, the sharper that two-edged sword.
It would give them a damn fine direct sales force and a way to sell Dell servers into the enterprise --http://www.brocade.com. No, I don't work for them. Frankly, I doubt if they can afford them ($2.5B plus 80%), but, in reality, they can't afford not to have them either.
And gets a Hole in one
Meanwhile, HP is trying it's 23rd swing at the 3par course, due to trying to charge such exorbitant equipment prices to businesses who are trying to save $$$.
Sorry, HP, you lose.
I owned an Inspiron 5150 once......
Within 3 years of ownership I had to replace the following while still under warranty:
- Motherboard: 4 times
- Heat sink: at least 4 times
After the third motherboard replacement I asked them to just send me a new computer and they said, "I'm sorry Dave, but I can't do that."
I bought a Lenovo T61 2.5 years ago and it was the best laptop purchase I ever made.
I always see this line of thought come from slashdoters, "why do companies have to keep growing, why can't they just keep doing what they're doing now?" Companies are not individuals they are long-lived entities that exist beyond the lifespan of any one individual. If I were to make the same analogy and say that the human race has achieved a lot already why bother trying to improve, would you agree with this comment? Even as individuals, shouldn't we always strive to be better?
They're making billions as box pushers, isn't that good enough?
No. Every publicly traded company is expected to grow. If the Dell's market is saturated and there are limited growth opportunities there then Dell will have to find new sources of revenue outside their traditional business. This becomes VERY hard to do when a company gets as big as Dell. It gets absurdly hard when a company is as big as GE. Dell made about $50 billion in revenue last year. To grow the business by even 5% (which would be considered low) Dell would have to find $2.5 billion in new revenue EACH YEAR. For perspective that means creating a Fortune 500 company from scratch every two years and that is considered underachieving.
If Dell can't do it the markets are not especially forgiving. Dell's stock price has fallen to 25% of its value in 2005.
While Microsoft isn't making headlines in the consumer market, over the last decade they have pretty much caught up with or surpassed the competition in the business space (ex: Java, Oracle, PHP, Amazon EC2...). They have however recently started focusing on consumers again with Windows 7 and Windows Phone 7.
And while Apple's per quarter revenue is catching up with Microsoft, in terms of gross profit Microsoft still has about twice the margins that Apple does, which makes sense because software is cheap to produce and distribute. The research and development numbers show that Microsoft spends twice as much of their profits (8 times the total amount) that Apple does, which also makes sense because all Apple really does is find new suppliers with smaller/cheaper/better parts.
Upgrade your Dell to something more in the 'professional use' category: A Workstation, mobile or desktop. They're sturdier, they'll last 7 to 10 years unless you abuse it, AND you get english speaking tech support 24 x 7. Of course, a workstation costs more , , , ,
To create new products and innovate in markets you need Research and Development.
You don't have to have in house R&D but if you don't you do need the cash to buy companies that do R&D. Cisco is actually a good example. They do some internal R&D but they acquire a lot of companies specifically for the products they develop. R&D doesn't have to be in house but if it isn't the company will have to acquire it. Dell has $10 billion in cash so they should be able to acquire technology. However Dell doesn't have a ton of in house expertise in M&A activity either (mergers are HARD to do successfully - most fail) so they're kind of in a tough spot.
You can't be a me-to follow on that wins with low manufacturing costs.
Sure you can if the market is for a commodity product or if your price point is low enough to outweigh the advantages of differentiation. Dell built a $50 billion / year company competing primarily (though not exclusively) on price. BUT there can only be one winner in a market where they are competing solely on cost. Few markets compete solely on cost but it is a huge factor nonetheless even in markets with significant differentiation.
How much do they make on a $400 laptop? Why do that to themselves?
Low margins can be fine if you have the volume to support them. Dell has annual revenue of $50 billion and net income of about $1.5 billion. That's about a 3% profit margin which is pretty good for a manufacturing company. Their gross margins are about 17% which is in the range of normal for a large manufacturing concern. Walmart does just fine with low margins but they have no illusions about moving into higher revenue products. Dell has been very good at being a low cost manufacturer and they should be comfortable with that.
There is a very large market for low margin products but (as you noted) it's very hard to simultaneously compete in low margin and high margin at the same time. People who shop at Nieman Marcus are very different customers with different expectations from those who shop at Walmart. Both strategies work and both serve a niche but you can't do them both at the same time.
I agree with your assesment, but is it correct to compare GE to Dell?
For the point I'm making (that top line growth is very difficult for large companies) sure it's a valid point. Keeping a consistent percentage growth becomes harder the larger a company gets. This is true irrespective of the specific industry a company is involved in.
GE is a conglomerate.
Which carries it's own set of burdens. GE is run amazingly well but it's very common for the component companies of conglomerates to be worth more as independent companies. More than once the question has been asked if GE would be more valuable in pieces than as a whole. The question comes up with any large diversified company. In recent years GE is really a finance company that has an industrial arm. During Jack Welch's tenure most of the profits came from GE Capital.
Dell is an IT company. While IT is vast, it comes down to selling computer hardware, network hardware, and the services to support it. Hardly as diverse and vast as GE who can scan your body, microwave it, fly it across the world, and tie it to a wind turbine.
I could have used Berkshire Hathaway or Tyco or any other conglomerate to make my point. Top line growth is hard for ANY company. Doesn't matter if they specialize or not.
3PAR. This was supposed to be Dell's answer for being SUB-PAR.
They are very good at supporting their customers when things go wrong. I have purchased a number of Dell computers and have had excellent service with them over the years, particularly when I've had hardware failures. They attend to them courteously and promptly.
HP on the other hand does not support its products. I purchased a very expensive color laser printer from them just a few years ago, but when Windows 7 came out and I upgraded from XP, I discovered they refused to make a new driver for this printer. I and I learned thousands of other customers like me were left high and dry. I will never, ever buy HP equipment again. They simply don't support their products.
Given that most computers these days are essentially built from commodity components, service becomes a much more significant issue in terms of total cost of ownership. With Dell I have come out ahead when it comes to service, but with HP I had a lot of hidden costs when it comes to support for the inevitable repairs. HP may look sweet when they are new, but they become lemons a lot sooner than they should because of HP's determination to cut service and support costs at the expense of their customers.
While Dell has foreign call centers and they did have a rough go of it early on, it seems to me that they have that largely resolved. If you are willing to be even modestly polite (I know difficult for many Americans, always determined to prove their cultural "superiority"), you can get quick fast service. This is no longer a problem. However, with HP, you'll be luck to talk to a telephone server machine that won't send you into phone hell or simply just hang up on you, if you can even find a phone number on their website.
You're right though they could do even better, for example get their servers to better pass service tag, identification info, etc. on to the next tech so you don't have to repeat it. Nonetheless, they have improved quite a bit.
Just be a really good box-pusher.
I'm thinking that they have an inferiority thing going. Equallogic boxes are *way* nifty and a solution for a huge percentage of users, but I think they want an answer to the fiber connected stupidly expensive storage options. Honestly, I don't think they really need it...
These guys are under appreciated. They'd be a steal for Dell to pick up at 1.1B.
HP has a lot of customers that have mainframes, HDS big boxes speak politely to mainframes
Maybe HDS relationship keeps going for a while?
When I am in the market for a new or used PC, laptop or any accessories for them, Dell doesn't even make the list! 5 years ago (or more) Dell took over the "made as cheaply as possibly from the cheapest parts" title, and has held it since. The only way I usually have a Dell around is if it was donated to me. I usually throw them out.
ttyl
Actually, Dell *did* have a niche, but they partially abandoned it.
That niche was the total customization niche. They stood almost alone in allowing a customer to choose every major component of a computer system and yet pay only a package deal price. No other large mail-order computer manufacturer gave you as extensive a list of options, not even close. It was heaven for techies who knew exactly what they wanted, and especially good for Linux fans who knew which hardware was supported by the kernel and which was not.
Unfortunately, in recent times Dell curtailed the options on offer pretty drastically. If the options you want are no longer on offer, you might as well go to any old box shifter for a compromise package deal, often at lower cost, and that seems to have happened.
Poor support is probably what's made Dell most unpopular though. Part of the problem is the outsourcing of support. Maybe it was just bad luck, but on a couple of occasions I simply haven't been able to understand the staff at all, and it was hard to be certain that they understood what *I* was asking for --- surely the mastery of English should be checked. In addition though, their ordering systems seem to have fallen apart. For example, not long ago I ordered memory for an older Dell box, supposedly in stock and available for immediately delivery, I paid, and nothing happened. Only after a pile of phone calls over a period of 2 weeks, did they finally admit that the memory was not available and could no longer be obtained. Gee thanks. I can get that level of service elsewhere too.
Dell's in a mess.
Expanding Dell's business means getting into services. IBM gets almost equal revenue from services as products. HP Bought EDS for the same reason - to grow their services market share. Dell bought Perot last fall - they need to figure services out - then pump up the volume. Simply buying another hardware products company won't do it. EMC is out there in storage land - and they own Teradata...any bets?
Dell is already an investor in 3Par, with a 33 percent stake as of Aug. 15 - see Bloombergs.com.
The stake probably cost Dell less than $300m
It's now worth $792m, plus there is a $72m termination fee, so HP owes Dell $864m - not bad.
I guess for $864, Dell can add any 3PAR features to Dell's EqualLogic product line.
If they were going to go after another storage vendor, Compellent is the obvious choice. Not only does it complement their last storage acquisition (equalogic), it expands on it. Alot of the key features of the equalogic are expanded on in the compellent storage...
Equalogic was... iscsi + thin provisioning + snapshotting + replication.... ... equalogic + fibre + scalability
Compellent is
Whats more, compellent pride themselves on the fact their storage runs industry standard components rather then being custom-built. I.e. their controller heads are supermicro boxes (running a modified version of the ecos? FOSS RTOS) with standard PCIe HBA's in them (unlike 3pars totally-custom-built model). The backend storage is simply Switched fibre jbods or SAS jbods. All of which Dell actually manufacture themselves (though compellent use xyltec or something?). They would simply be buying the software component off compellent really. Hell, they could do a deal with compellent and just license the OS. Replace the components Compellent use with Dell's R710's (or whatever) and Dell's own storage boxes (SAS and SATA), and you have a serious storage story worth talking about (from a dell perspective).
To me, compellent is a much more sensible acquisition (or partnership) then 3par ever would be and so much easier to transition into with their own components... Add some framework for integrating it all into the Dell PAN software they license from egenera and you have a very interesting and compelling (no pun intended) story in terms of data center management...
The sad part of loosing 3par is probably that Dell perhaps put a huge dent in their emc relationship... whooops... so they may need another storage story and fast... on the plus side, with HP aquiring 3par, HP would probably not have the money to block a buyout of compellent if Dell tried (though hp probably do have the money to spare in reality)
That of course doesn't address any of the other area's Dell could expand into though, i.e. tables, phones, music or whatever. Maybe they should look at doing their own networking kit? im sure there are a few vendors out there ripe for buying in that space...
just my 0.02c
What you want is offered by independent retailers, however. At least in Germany all major online computer (part) retailers offer BTO, operating system and support optional. You pay for the hardware, a small fee for assembly and S/H costs. After that, the box is entirely out of the retailer's hands unless you bought a warranty plan.
The nice part is that European law forces them to offer the usual warranty (minimum of two years, for the first six months the burden of proof lies with the retailer) and you usually get retail boxes (plus accessories) for all components (perhaps sans case) so if something breaks you can RMA it.
Dell is maybe interesting for laptops but independent retailers give me total control about which parts go into my desktop at prices fairly close to Dell's, especially since I don't have to buy Windows unless I want it. If I do buy Windows I get a DVD, not a partition. There are no custom parts of unknown compatibility or preinstalled crapware, either.
Dell advertises how they offer BTO systems... but the truth is that other companies are doing it better, as far as the home user sector is concerned. As far as the singular customer is concerned, Dell has been out-Delled.
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