Dell says it's speeding into Internet business
dallasnews.com
04/06/2000
By Leah Beth Ward / The Dallas Morning News
NEW YORK ? Dell Computer Corp. said Thursday that it is moving at full speed into the growing market for Internet infrastructure as more companies ? especially small and medium-sized ones ? rush to create an online presence.
Internet infrastucture is the combination of hardware, services and access underpinning the electronic economy.
The shift reflects the realities of falling PC prices and Dell's admission in March that it won't be able to sustain last year's growth rate of 38 percent in the current year.
"What we're doing is moving from providing products to service," chairman and chief executive Michael S. Dell told Wall Street analysts at a conference here.
But positioning itself as an Internet one-stop shop while keeping its cache as a "close-to-the-consumer" computer company could be tricky, analysts said.
Dell pioneered the direct method of computer sales, online and by phone, giving it a leg up on pricing.
Few question the potential of the infrastructure market. Projections are that it will grow from $124 billion last year to $370 billion by 2003.
To capture a chunk of the business, Dell Computer, based in Round Rock, Texas, outlined several new initiatives.
Central to the strategy is the market for low-cost servers, special appliances devoted to such tasks as Web serving.
Mr. Dell minimized the importance of rival Compaq Computer Corp.'s lead in the server market, suggesting it gained the position through acquisition, not internal growth.
"They got the lead by buying Digital [Equipment Co.],' he said. "But we took 10 points of market share last year, and when we're the leaders we're going to shout it from the mountaintops."
Mr. Dell ducked a question about the effect on Dell of the antitrust verdict against Microsoft Corp. Like other PC companies, Dell is intimately tied to Microsoft's Windows operating system.
"We're not here to discuss Microsoft," he said, adding that he expects no diminution of demand for the Redmond, Wash., company's products because of the ruling. |
