Sunday, June 04, 2006

Can Dell continue to deliver?

Two years ago, when Dell revealed its enterprise strategy, I mentioned that the company will drive industry standards even if such standards happen to be proprietary, presumably because of its customer focus. Hell, I was wrong.

Dell's recent announcement that it will start shipping AMD-based servers was not about putting customers first. If the company was really concerned about serving its customers, it would have shipped Opteron-based systems long ago. But Dell claimed that the demand for Opteron-based systems wasn't apparent during the last year or so.

For those who find this claim hard to believe, the obvious conclusion is that Dell's decision had something to do with boosting its flagging financial fortunes on Wall Street. As it is, investors seemed to have bought the story.

The bigger question, however, is whether Dell can continue to deliver. In his Biz Bytes blog, Dan Briody argues that Dell is an operations company, not a technology company. Its contribution to the IT revolution is not technology, but cost reduction. How far it can continue to flog the operational efficiency horse remains to be seen. With margins being squeezed all round, the future isn't looking bright for the former darling of the PC industry.

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