Dell just turned 35 last year and believe it or not, the company is bigger than ever. In its long history, Dell has successfully transitioned from a PC maker to a technology conglomerate that brings in over $90 billion dollars per year. But Dell’s overall reputation with Generation Z might be a bit outdated.
Many young people picture their purple old computer when they hear about Dell. For most, Dell was their first brand of computers. But if you asked them what Dell is doing today, they’ll probably have no clue.
A big brand should identify with a word. For example, a search is identified with Google and microprocessors are identified with Intel. The same is the case for Dell. Most people relate Dell with PCs as the company was first founded as a PC company.
What is Dell up to These Days?
Dells’ founder, Michael Dell, made a name for himself with build-to-order personal computers. But his company also dipped its hands in lots of other technologies like flat-panel TVs, digital music players, printers, and servers.
But Dell’s rise in popularity didn’t last forever. By 2013, demand for PCs was stagnating because of smartphones and tablets. It was seen as a declining business. If Dell was going to stay relevant, it needed to change its strategy. It decided to go from a hardware-provider to being a full-fledged solution provider.
When Dell went private in 2013, they made a few changes. They invested more in research, development, sales, and service. They started making acquisitions, most notably the large acquisition of EMC which brought with it VMware.
VMware is basically a virtualization company. It allows users to log into their desktop via the cloud from their phones, tablet, etc. Essentially making hardware irrelevant.
In 2018, Dell returned to public markets as Dell Technologies. They felt that there was investor appetite, particularly among large institutional investors in owning a broad technology company. Why? Well, to put it frankly, there just aren’t many more of those.
Dell’s main priority isn’t the consumer anymore. They are focusing on enterprise, hardware, and software. In other words, Dell is selling to businesses. They‘re not only selling PCs, monitors, and printers on the hardware side but also software packages, servers, networks, and storage for data centers.
Main Competition
Dell has become so diversified that it now has multiple competitors in numerous industries. In the cloud server market, their main competitors are Microsoft, Salesforce, Workday, and some other companies. From the enterprise hardware standpoint, there’s Cisco, Juniper, Ericsson, and Oracle. In the consumer PC and printer industry, there’s going to be HP, Lenovo, and Apple.
Difficulties
It’s very hard to find a company that can compete with Dell on all cylinders. However, it’s also very difficult to manage a company at that size. Just imagine how hard it must be to track the budget.
There’s also the issue of debt load. Investors don’t like to see a lot of debt on technology companies because there’s already a lot of operating risks. You don’t want to pile on a lot of financial risks as well. Dell’s debt is still manageable but if the economy goes into recession then the alarm bells will inevitably start ringing.