Dell Inc. made its most aggressive push into the small and
medium-sized business (SMB) space in years Tuesday with a new line
of PCs. Experts say the move was an attempt by the ailing computer
maker to find a niche that helps it gain new customers.
The new systems were announced during a live webcast from New
York, where CEO Michael Dell fielded questions from small business
owners (a group that was seemingly devoted as well as disgruntled)
in a town hall-style forum. The Round Rock, Texas-based business
said it plans to conduct several similar forums throughout the
country in the coming months.
Dubbed
Vostro (Latin for
yours), the new
line includes three notebooks with screens ranging from 14 to 17
inches and starting prices from $449 to $799. A desktop version
will be available starting at $319. Systems will be available
with Windows Vista or XP operating systems.
Dell said the Vostro products target businesses with fewer than
25 employees -- the very small end of the
SMB market -- a segment virtually ignored by most computer
vendors.
Vostro PCs have no trialware loaded -- a big plus for many small
business owners. They also have simple-to-use tools that address
top-of-mind problems for SMBs such as data backup, PC performance
and specialized networking support for customers without dedicated
IT staff, including Dell Automated PC Tuneup and Dell Network
Assistant for setup.
Dell is trying to "address your biggest headaches," Michael Dell
said. "It's a promise we're making to you. We are making a very
serious investment in small business."
Analyst Charles King of Pund-IT Research in Hayward, Calif.,
said that although Dell has made this pledge to SMBs before -- most
notably in February after
CEO Ken Rollins was fired -- Tuesday's proclamation might say
more about Dell's intentions to turn the company around than
anything else.
"I think when a vendor hits rough water at some point you have
to look around and say, 'What do I do best?'" King said. "Do I want
to be seen that I'm trying to catch up or do I do what I know that
no one else is doing. They're leveraging existing strengths and
striking off in a direction that the competition hasn't really
addressed."
King added that making a lot of money off a lot of small-margin
sales is Dell's strategy. "They're good at squeezing revenue out of
each sale. They can make sales to small businesses work that some
other vendors have trouble with."
In addition to network support, the new systems come with 10 GB
of free online storage -- a freebie customers say is nice, but a
drop in the bucket compared with what most small businesses
actually need.
Glen Phillips, president of Forté Inc., a Mobile, Ala., computer
services firm attending the forum, told Dell that nearly a third of
the cost of his IT infrastructure was devoted to backup. "Backup is
still in the Stone Age," Phillips said, adding that with about 500
GB of storage already, managing it "is a problem we're seeing
growing and growing."
Dell's answer: Online services. "The fact that we can include
10G on a laptop foreshadows what we can do in the future," Dell
told Phillips.
But Dell's future is unclear, say skeptics, noting this past
year especially. In addition to the ongoing investigation by the
Securities and Exchange Commission into the filing of possibly
inaccurate reports, which forced the company to delay filing its
second-quarter financial results, the company has been battered
with disappointing earnings. In February it fired Rollins, putting
Dell back at the helm, and then reorganized many of the company's
top business groups. In May, it said it would cut 10% of its
workforce, or about 8,800 jobs, over the next year.
Still,
Wall Street has remained bullish on the company. Shares closed
at $28.61 Tuesday.
Indeed, Dell has been reaching out to its customers and this
announcement says it's listening, said Hans Casto, notebook analyst
at Current Analysis Inc. in Washington.
"They realize that taking their bread and butter and shoving it
into other channels wasn't working," he said. So, it's adding more
services, more SMB-centric features.
"They're making a commitment to support this group in the
future. They're not just saying, 'Here's a new model.'"
Let us know what you think about the story; email:
Kate Evans-Correia, News
Director