Dell will become irrelevant. And to say it’s a case of too little, too late is merely stating the very obvious.
I have no doubt that the likes of Hewlett-Packard, Fujistu Siemens and Lenovo for starters will have scrutinised last week’s not-so-shocking announcement about Dell deciding (or should that be admitting?) that it will use the channel.
They are right to be worried; Dell is everything they are and might be more. It has the brand, the money, the might and now the will to overtake them in many of their core markets. But it has had its troubles too; the share price has tumbled (although it rose slightly after its channel announcement), it has lost its market share crown and it is 23 years behind the rivals in terms of channel maturity.
However, this is still mostly irrelevant. Dell is a hardware vendor and for that reason it may never again reach the dizzying heights of where its share price was two years ago.
With the commoditisation of PCs and servers still happening at an alarming rate, the reality of the one or two point margin is setting in. And, despite the vendors’ attempts to convince us that their box is better than their rivals, inside we all know they are pretty much the same. It is the software running over the top that has become the crucial element to computing. This is why IBM is currently looking at the Dell announcement with a wry smile. Big Blue no longer feels the pressure and must be feeling smug about offloading its PC business and moving into software.
There may become a time when firms simply give their users a wad of cash to buy their own PC, laptop or device, the users manage it and look after it themselves, and the applications needed are just pushed out over the internet by the user.
But this is in the future.
Right now the channel faces a tougher decision. Temptation – be it a chocolate bar, that last drink or working with Dell – is always hard to resist.
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