TTOSBT -
What I would like to see DELL do and what they seem to be doing are two different things, but at least I am seeing signs that their plans are starting to bear fruit.
Leaving aside all of the analysis of what's happening in the PC market, the margin trends, and the rest of the macro analysis, DELL as a company struggles with the perennial problem of a fast growing tech company - how to attract and retain good people, and how to instill those people with a sense of the DELL culture.
Despite Austin's reputation as a mini-silicon valley - IBM, CPQ, DELL, and a host of smaller tech companies all have facilities there - it is hardly in a league with the California bay area as a high tech mecca. Some of the DELL middle managers I have talked with in the last year say that it is increasingly difficult to attract quality talent that wants to build a career with DELL in Austin. In order to quickly assimilate those who do, and also get the best performance out of the employees already in place, DELL management needs to have clear, simple and well understood marching orders, and DELL has done a great job in developing and driving mission awareness based on the "be Direct" mantra.
Almost anyone in the organization can understand what that means, and how it applies to his or her job. The shift in game plan DELL is making will cause the least disruption on the existing machine if it is a logical extension of that thinking. And so the emphasis on "getting back to our core business"...
This prompts DELL to apply management focus on enterprise sales and the growth of that market by incremental expansion rather than radical shifts in business model, a reasonable plan given that they are growing that business at twice the rate of their competition. Small shifts in R&D like the development of their wireless mobile product give a competitive advantage, or remove a barrier, without disrupting the picture. Creation of initiatives like ASP hosting allow the "normal" DELL machine to develop another significant market - hosting provided by DELL and Intel - which looks like a normal fulfillment to the bulk of DELL.
IMO DELL needs to spell out more clearly what the impact of those and other initiatives will be on the next few quarters, in concrete terms, so that people can understand how DELL will meet its revenue and earnings targets. The days when that could be taken for granted are long gone. |
