Dell reinventing itself, but support issues linger
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Dell&#39;s efforts to reinvent itself this year through a dramatic break from its direct-sales model, expanded services, and new enterprise offerings have shown positive early results, but some users have lingering concerns about supply chain management and support -- long-time issues for the company.Weathering an accounting scandal and a slump in profit,&#160;founder Michael Dell reclaimed the helm of the company after CEO Kevin Rollins resigned in January, quickly replacing top managers and in May announcing plans to lay off 10 percent of the company&#39;s workforce.For years, Dell was the top PC vendor in the world, an acknowledged master of logistics in a business where margins can be razor-thin. It was efficient enough to keep prices low to ward off competition without suffering big setbacks in profits. But by 2006, when Hewlett-Packard unseated Dell as global PC leader, that was no longer the case.Dell&#39;s plans to regain its former dominance have resounded in the market. The company&#39;s third-quarter results, announced two weeks ago, showed profit increasing year over year, and record revenue of $15.65 billion. During the company&#39;s earnings call, Michael Dell said the company will put products on more retail shelves worldwide while also helping business customers &quot;simplify IT&quot; and reduce maintenance costs via customized hardware, software, and services.The company has also moved to put accounting issues behind it, recently&#160;completing an internal investigation and restating its financial results from fiscal 2003 to the first quarter of 2007.The company has been making an effort to build relationships with customers and partners and deliver products that are easier to deploy and manage, said Charles King, principal analyst at Pund-IT.Last month, Dell introduced a two-tier channel program designed to give partners better access to Dell&#39;s training, marketing, certification, and online resources. The program will provide a better chance for Dell to interact and understand its partners&#39; needs, the company said.&quot;The company seems to recognize that it has bridges to enhance with customers and partners in the channel. It&#39;s not something that&#39;s going to change overnight,&quot; King said.After years of success selling PCs directly to users, the consumer business&#39; direct-sales business model hit a wall as component prices fell, Pund-IT&#39;s King said. The strategy to simplify IT is a play at SMBs that will help Dell deliver better returns in the long term than its lower-margin direct consumer business, analysts said.However, some customers continue to have concerns about the company&#39;s support and supply chain issues.Dell is having supply shortages and can&#39;t get its servers and OptiPlex desktops to individuals and small businesses in a timely manner, said Josh Kaplan, who runs a franchise of computer support firm Rescuecom and purchases parts and interacts with Dell on behalf of customers.&quot;You can acquire all the technology you want, but Dell will send hardware out blindly,&quot; Kaplan said. It will be a challenge for Dell to deliver what it calls &quot;IT in a box&quot; -- its terms for packages of products and services -- to SMBs and enterprises, Kaplan said. Dell has traditionally delivered mostly standardized systems, Kaplan said. While Dell has built systems to order by letting users select from a menu of options, it does not have in-depth experience offering customers services over the lifecycle of products, he said.Jeremy Cole, owner of Proven Scaling, a small consulting firm with offices in the U.S. and U.K., said Dell has internal staffing issues that affect its support services.&quot;Dell&#39;s sales structure is really strange. They tend to bounce your company around to a new account representative every few months who are wildly differing in experience, intelligence, and understanding of the Dell sales system,&quot; Cole said.Cole is satisfied with Dell equipment but said the company needs to show more support for open-source applications and the Linux OS. &quot;It&#39;s clear that Dell cares about Linux in that all its server-class hardware is well-supported by the Linux kernel and it has many people dedicated to making sure that&#39;s the case. However, it&#39;s not good enough just to boot,&quot; Cole said.Though generally positive about Dell&#39;s support, Jason Dunn, who runs Thoughts Media, which publishes Web sites for technology enthusiasts, couldn&#39;t resolve certain LCD&#160;monitor problems with Dell offshore support representatives. He had good experiences with Dell&#39;s PC and HDTV support representatives, so the experience varies, Dunn said.Other users have had a good experience with Dell&#39;s strategy to simplify IT. Dell&#39;s efforts have paid dividends for Bikeworld.com, a medium-size retail business in San Antonio, which saved money by cutting its internal IT person. The company uses Dell systems with Microsoft Dynamics Retail Management System, connected to multiple offices via a VPN.&quot;Businesses are in a belt-tightening mode. You can&#39;t have extra people on payroll,&quot; said Whit Snell, general partner at Bikeworld.com. Bikeworld has resolved IT problems with Dell remotely and has a contact readily available to help with problems.Dell officials were not available for comment on support issues.Overall, Dell is trying to be more proactive and helpful, said Kurt Scherf, vice president and principal analyst at Parks Associates. Dell&#39;s new enterprise support services to simplify IT, like remote management services, could, if successful, trickle into the consumer segment, which could benefit end-users, Scherf said.Dell this year has tied up with retailers like Staples,&#160;Wal-Mart, and&#160;Best Buy&#160;to distribute PCs, something competitors HP and Acer have been successful at. But if Dell wants to make sure its customers aren&#39;t tempted by HP or Lenovo in the retail market, fixing problems that some users report about its support infrastructure has to be on top of the company&#39;s to-do list, Pund-IT&#39;s King said.Building out retail partnerships changes the consumer-facing relationships for Dell, which could lead to positive changes in the company&#39;s support and services. The results are a work in progress, King said.Balancing out its business model, Dell is showing signs that renewed efforts in the higher-end business sector are catching on, with third-quarter revenue growing in the server and storage markets. The enterprise market provides better margins than retail, and the remote management services market is growing, King said. Dell is trying to address that through acquisitions and by creating a services organization and specialized products targeted at professionals and businesses.The company this year&#160;acquired SAN (storage area network) vendor EqualLogic&#160;and managed services companies&#160;Everdream&#160;and Silverback. It announced a deal with Sun to offer the company&#39;s Solaris OS.Dell has been pushing hard to improve its systems management portfolio, especially remote desktop management capabilities that could help simplify complex IT infrastructures. In October, the company announced On-Demand Desktop Streaming, a server-based platform that streams the OS, applications and data to diskless desktop clients over a Gigabit Ethernet network.By offering design improvements and bundling software and services like remote management, Dell is trying to get the focus off of price and moving to build the framework for a new business model for the enterprise, said John Spooner, senior analyst at Technology Business Research.Dell&#39;s reinvention should come as no surprise as Michael Dell is on a mission to reconstruct his company, Pund-IT&#39;s King said. &quot;It must have been hard for Dell to see a company he built falter,&quot; King said. He is putting money in the right spots, and competitors like HP and IBM will do well to keep a close eye on Dell, King said.
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Dell Inc.  is leaving the LCD television business to focus on its core PC products amid an ongoing company overhaul by founder Michael Dell, Taiwan media reported on Thursday.
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Dell Inc.  said on  Thursday it is experimenting with new ways to sell computers, a  first step that analysts say is needed if Dell wants to better  compete with Hewlett-Packard Co.  and Apple Inc.  .
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InfoWorld - The new team of leaders at Dell is weighing a request to give customers the option to purchase PCs with the Linux OS, instead of the default Windows, after thousands of users voted for that idea on a company blog.
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Dell (Nasdaq: DELL) is giving its corporate customers a break, announcing price cuts on hardware ranging from enterprise servers and workstations, to desktops and notebooks for large business and institutional customers.
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The effort to dominate their way into a de facto standard isn't sitting well with rivals HP and Dell.
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Danger, Kevin Rollins! Dell's moves to lower prices, hire more understandable customer service reps and stop product fires do not appear to be helping its immediate fortunes.â¦
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The speculation regarding Dell building a new handset starts up again.
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Dell  is in the middle of a  brewing image crisis, launching its biggest-ever product  recall, reporting a sharp drop in profit, and disclosing an  accounting investigation all in one week.
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(InfoWorld) - In a bid to reassure nervous investorsÂ in the wake of a federal investigationÂ and aÂ battery recall, Dell executives have announced a corporate overhaul dubbed "Dell 2.0." The strategy calls for Dell to recover from slumping profits by making a series of basic changes, such as building factories closer to emerging markets, and putting more emphasis on industrial design, Chief Executive Officer Kevin Rollins said Tuesday in New York at Dell's annual Technology Day. "We've spent the last 22 years following the Dell business model, but as the marketplace changes, the needs and desires of our customers have also changed," Rollins said. "We are re-evaluating every aspect of our business model, from supply chain and design to customer service and support." Dell is suffering through a brutal stretch. The company announced on Monday that it would delay filing its quarterly Form 10-Q because an investigation by the U.S. Securities and Exchange Commission had raised the possibility Dell might have to restate past quarterly earnings figures. And in August Dell worked with the Consumer Product Safety Commission to recall 4.1 million laptop batteries with a defect that could cause them to overheat and possibly catch fire. Under its new plan, the company will form a team of 60 designers by the end of 2006, dedicated to improving the design and usability of Dell PCs instead of focusing solely on price and performance. And the company has already begun to move away from its centralized production model by building PC factories in emerging markets like Brazil, India and Central Europe, he said. In other aspects of the overhaul, Dell said in July it wouldÂ begin using consistently low prices instead of complex rebates, and said in June it would offer enterprise-scale IT management to midsize companies under a Platinum Plus services plan. The strategy extends to products, too. Under the new strategy, Dell will continue to design PCs with chips from Advanced Micro Devices Inc. (AMD). Until recently, Dell had used only Intel Corp. processors, but this week launched two AMD-powered desktops and plans to sell AMD-based servers by the end of 2006. Dell's transition to a two-processor company is harder than simply swapping chips, said Chief Technology Officer Kevin Kettler. As Dell engineers create AMD-based PCs, they face a host of challenges -- testing and evaluating the systems, creating a logistics plan to supply processors to factories worldwide, and fitting the new components into their supply chain management plans. "Any time you bring on a new vendor to introduce a major piece of silicon, there's a natural process of aligning the new technology with our products," Kettler said. "I personally have worked for seven years with AMD on Dell's behalf, driving Opteron technology into the server space. This is not a short term, one-product-and-out deal, but a long-term relationship." In another design-centric change, Dell will join Hewlett-Packard Co. and Lenovo Group Ltd. to use DisplayPort, an interface standard that enables high-speed, two-way communications between PCs and displays. The new specs were approved in May by a governing body called the Video Electronics Standards Association. Under current technology, engineers use graphics controllers inside PCs and TVs to send signals to either digital or analog monitors ranging from CRTs (cathode ray tubes) to LCDs (liquid crystal displays) and plasma screens. "Those interfaces all just evolved, so you need to do development over three different interfaces with a multitude of technologies, and you can't take advantage of shared resources," said Kettler. In contrast, the new standard will use PCI (Peripheral Component Interconnect) Express interface to forge a "direct drive" link between the PC and monitor, always keeping the information in digital format. That will allow designers to build displays with embedded cameras and microphones, and will also preserve digital rights management, ensuring that data flowing across the cable can be only displayed, not copied, Kettler said. Â
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It turns out that Dell (DELL) isn't the only longtime commodity PC vendor looking to make build a new name for itself among high-end PCs users and the gaming set.
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By offering design improvements and bundling software and services like remote management, Dell is trying to get the focus off of price and is moving to build a new business model for the enterprise, one analyst says.
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Look for more consumer electronics products and services from the PC behemoth. Also: SuSE Linux for Dell servers.
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Dell is both profitable and well regarded, thanks to its habit of delivering serviceable but unexciting products at good prices and supporting them well enough to keep buyers coming back.
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Dell Inc. says it opened a new support center this week in Xiamen, China, for business customers who buy servers and storage equipment.
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Microsoft is set to change the way that organisations handle upgrades. The company has teamed up with Dell and Vintela in an attempt to cut the people-hours that are spent on software support.
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Round Rock-based computer giant Dell Inc. (Nasdaq: DELL) is revamping customer service -- going so far as to make house calls. The reforms offer customers new avenues for help and a new stream of revenue for Dell.