Michael Dell maps out Dell's future

Dell's chief executive, Michael Dell, was in London this week to share his views on green computing, the web and whether his company's PC sales model is strong enough to keep the Dell share price buoyant.

Dell's chief executive,Michael Dell, was in London this week to share his views on green computing, the web and whether his company's PC sales model is strong enough to keep the Dell share price buoyant.

Dell is wildly enthusiastic about its green computing initiatives and had set itself a target to become carbon neutral by the end of 2008. It reached this goal in August. Keen to extol the virtues of his company's environmental computing initiatives Micheal Dell insisted that, "Dell intends to be the most green IT company on the planet."

Micheal Dell's interview with the IT press was not a solo affair he was accompanied by the company's senior vice-president for Europe Middle East and Africa, David Marmonti, who explained how Michael Dell's re-emergence at the helm of Dell Computer Corporation some 18 months ago had been a natural process. Although Michael Dell had been spending a period in a comparatively "back-seat" position as company chairman, coming forward to lead the company again as CEO was apparently an easy process because of his constant proximity to the board.

Dell's green credentials

Passionate pledges, responsibly addressed programmes for recycling and carbon neutrality notwithstanding, it is true that Greenpeace rates Dell on a fairly mediocre level for its greenness. The facts are that in 1992 Dell introduced the world's first fully recyclable PC and the others have been playing catch-up environmentally since then.

Dell's vision (the company and the man himself) is focused on the brave new world of the more "connected era" that we find ourselves within now. With 500,000 new users per day joining the internet community. The next billion users will be racked up within the next three to four years and some estimates put the total number of devices in usage at about the 14 billion mark by the year 2010. This is an explosion of information, an explosion of access channels and an upward spiral in the complexity of the data that is transmitted.

What Dell Computer Corporation is saying is that the new global marketplace is not just an enterprise-level phenomenon it is also the case that small to medium sized businesses (SMBs) are crossing international borders and this is a challenge for CIOs everywhere. Dell has moved from its direct-only sales model to exist in 13,000 "storefronts" around the world in an attempt to try to soak up demand.

Michael Dell's company scooped up EqualLogic for £700m in November of 2007. He says that he wants to use virtualisation techniques to address the perennial challenge that exists with many servers still sitting at 15% to 20% utilisation levels. "With EqualLogic technologies, we will migrate customers to I-SCSI based storage area networks. We are VMware's biggest customer and we believe that virtualisation and server consolidation is key to changing the reality of the situation that exists," said Dell.

"I believe that virtualisation will move and spread right across the industry from the server to application delivery on the desktop," said Dell. "Further, I think you will see that cloud computing will 'intersect' with virtualisation techniques to drive further efficiencies. But we have a very wide variety of customers and streaming applications to the desktop will not work for everyone so I do not want to say that one size fits all."

Another Bric in the wall

Michael Dell believes that much of the next phase of growth will happen in the so-called Bric countries (Brazil, Russia, India and China). Asked what he would do now in what market if he had the option to start up a company again he said, "Storage something in China something truly open (such as open source) and something truly disruptive and interesting, possibly in the mobile space."

Looking deeper into the fact that Dell as an essentially hardware-focused company is looking to position its line of server technology with the most currently favoured flavours of Linux, I asked where the company stood regarding open source technologies in the wider world of IT.

Marmonti stepped in and said, "We are aligned with all open standards, products have changed and shipped with different flavours of Linux over the last few years and many of the moves we have made have been down to feedback from our customers."

Moving the green agenda

Michael Dell explained that one of the reasons he was in town was to meet with government officials and British CIOs to discuss his green initiatives. "We have saved our customers £1.5bn through green initiatives and we continue to see costs coming down," he said in reference to his "energy-saving" blade servers.

"Most people will pay a small amount extra to save energy in the long run," said Dell. "Energy costs have risen radically and companies now see it as a key factor in the total corporate planning programmes."

These are difficult times and despite a faltering share price in recent months Michael Dell was at pains to stand his ground. "Markets have been very volatile recently, but we cannot manage and control those factors - all we can do is manage our own company to adapt to the market. In the first half of 2008 we grew 50% faster than the rest of the industry - as for the rest of the year, we will have to wait and see what happens."

Asked whether so-called small form factor "netbook" PCs would be a significant and key driver for sales in the months ahead, Michael Dell doubted it would, saying, "I do not think they will be a massive driver and I am not fond of the term 'netbook' in the first place. If you look at screen size, 80% of the laptops we sell run with 14 or 15 inch screens."

His comments on this segment of the market should not come as a surprise. The company's market split is 18% consumer to 82% commercial. Miniature keyboards do not perform well at the enterprise level or make a great deal of unit sales profits, compared to blade servers and his company's services division which he would desperately like to make more money from.

"Does IBM have a bigger services division than Dell? Sure it does. But ours is faster growing. Do we intend to undertake acquisitions in this space in the way that Hewlett-Packard has to grow our market share? I would not hold your breath. We prefer to make smaller acquisitions and grow organically. We have a good track record with organic growth," said Dell.

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