Dell has introduced new system management features as well as new Dell PowerEdge servers to address the evolving technology demands of large enterprises, small-to-medium-sized businesses and public organizations. Dell is introducing nine PowerEdge blade, rack-mount and tower servers and three Dell Precision tower workstations updated with the new Intel Xeon 5600 “Westmere-EP” series of processors, as well as new enhancements to Dell Lifecycle Controller and Dell Management Console (DMC).
These hardware and software solutions will offer customers management capabilities while providing IT platforms for virtualization, server consolidation, mission critical business and database applications.
CIO Today reported that Dell’s fourth quarter was “disheartening,” due to a profit margin that was below expectations, which resulted in a 5% decline in net income despite an 11% increase in revenues.
Dell’s earnings release attributed the margin issue to higher growth in its lower-margin consumer division (11%) than in its business division (9%).
Dell’s problem—having to trade off between growth and profitability—is due to the loss of its competitive advantage. The company’s spectacular growth and stock price appreciation of the 1990’s (the stock peaked in 2000) reflected the fact that Michael Dell had devised a fantastic new model for making desktop computers—building them to order. By minimizing parts and finished goods inventories as well as accounts receivable (because most customers ordered and paid for Dell’s PC’s over the Web in advance), the company was able to be both the lowest cost supplier of a commodity product (desktop PC’s), as well as be very profitable. But since then, laptops PC’s have grown faster than and taken share from desktops. This trend is expected to continue. Trefis.com estimates “that desktop sales declined from a peak of 153 million units globally in 2008 to 137 million in 2009. We believe that desktop unit sales will dip further in 2010 and slowly recover to 2009 levels” in 2016. In contrast, Trefis projects that “global notebook and netbook shipments to continue to grow from an estimated 157 million shipments in 2010 to about 230 million shipments by the end of” 2016. Unlike desktop PC’s, laptops are complex to manufacture and cannot be “built to order.” This requires Dell to have parts inventory, finished goods inventory, inventory in the distribution channel, and store inventory. As the company is seeking to expand its retail presence, the latter inventory will have to grow.
Dell today introduced OpenManage Integration Suite for Microsoft System Center, a portfolio of software tools designed to help customers efficiently , securely, and cost-effectively utilize and manage standards-based IT resources.
These software tools will enable large enterprises, public organizations and mid-size companies to gain visibility, control, and flexibility of their Windows-based IT environments.
Dell said today it has agreed to acquire KACE, a leading systems management appliance company with solutions tailored to the requirements of midsized businesses and public (government, education and healthcare) institutions.
The move puts Dell more into the system administrator side of I/T.
Synchronoss Technologies, Inc., a global provider of on-demand transaction management software platforms, today announced that its ConvergenceNow® Plus±™ platform has been selected by Dell Inc. to globally enable on-demand activations of Dell’s entire connected device portfolio, including Dell’s first smart phone, designed on Google’s Android Operating System. The ConvergenceNow® Plus+ platform will enable Dell to offer its customers across the globe a unique experience via the online channel including streamlining subscriber management functions, as well as, cross channel global service activation with multiple service providers. The initial markets supported will be North America and Europe, and then expanding on a global basis throughout 2010.
Dell Thursday night reported net income of $337 million, or 17 cents a share, in the quarter that ended on Oct. 30, down from $727 million, or 37 cents a share, it earned in the same period last year. Dell’s revenue fell to $12.9 billion from $15.16 billion,
Earnings and revenues missed Street estimates.
Dell allegedly received billions of dollars in payments over a four-year period to use chips made by Intel Corp., payments that sometimes totaled more than the computer maker's reported profits for a fiscal quarter, according to a lawsuit filed on Wednesday.
Dell, the world's third-biggest computer maker based on shipments, was allegedly paid about $6 billion between February 2002 and January 2007, according to the lawsuit. In one fiscal quarter, the lawsuit says payments from Intel constituted 116% of Dell's reported net income. The allegations against Intel are part of an 83-page lawsuit filed by New York State Attorney General Andrew Cuomo. The lawsuit alleges Intel paid computer makers to discourage them from using chips made by competitor Advanced Micro Devices Inc. (AMD). Other computer makers alleged to have dealt with Intel include Hewlett-Packard Co. (HPQ) and International Business Machines Corp. (IBM).
Dell announced the completion of its tender offer for Perot Systems Corporation, an offer which has expired. Dell has accepted the shares validly tendered and has notified Perot Systems Corporation of its exercise of its top-up option to acquire Perot Systems shares.
As a result of the tenders and the top-up option exercise, Dell will own more than 90% of outstanding Perot Systems Corporation shares and expects to promptly complete the acquisition of Perot Systems Corporation, significantly expanding Dell`s portfolio of technology services and business solutions.
Dell was found liable for $12.8 million in damages over unfair competition and conspiracy claims in a lawsuit involving the New Orleans’ problematic crime camera surveillance program.
Defense attorneys characterized Southern Electronics Supply Inc. and Active Solutions LLC as losers in a competitive environment whose own pricing and pace of work cost them city business. They also suggested the local companies were going after Dell because of its relatively deep pockets.
Dell Computer has been replaced by Taiwan-based Acer Inc. as the Number 2 computer maker in the world. This announcement comes on the heels of Dell’s announcement that they will be closing a manufacturing plant in North Carolina, cutting nearly 1,000 jobs. Dell plans to outsource its North Carolina jobs to Mexico and other countries.
The events highlight that as Dell expands beyond its hardware business to software, services, and network management, the need for facilities such as the one closing in Winston-Salem, North Carolina, diminishes—along with the profits they generate. The devices U.S. facilities produce can be made faster and cheaper elsewhere, which is one factor in Acer’s overcoming Dell in the rankings.
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