Dell Turns Attention to the Midmarket
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Technology giant Dell is going to turn its attention--and a lot of money--to the midmarket, according to its CEO Michael Dell. In remarks made at an analyst conference, Dell said the company would pour $1 billion into acquisitions of midmarket companies in an effort to better serve businesses with up to 5,000 employees. "Acquisitions will continue to be critical focus of strategic investment activities," the Financial Times reported Dell saying.
Dell and his executives detailed how the acquisitions and shift toward newer technologies is pushing the company toward a goal of being an IT services company in the same vein as Hewlett-Packard, IBM and Oracle. The company has already snapped up 11 companies over the past two years in pursuit of this strategy, including EqualLogic and Compellent, cloud company Boomi and security firm SecureWorks and services company Perot Systems.
In the next year, Dell plans to focus on three areas, which include data management, IT services within the growing world of cloud computing and revamping the company's traditional user computing model by selling more software and services to these customers. The business customers of No. 2 PC maker Dell helped the company finish its fiscal 2012 first quarter ahead of estimates, with net income of $945 million on revenue of $15 billion. While the revenue figure was up 1 percent from a year ago, net income was up 177 percent.
"Through the purchases of Compellent, SecureWorks, Boomi and KACE, Dell has inorganically positioned itself to take on competitors such as IBM and HP, who can address large-scale buildouts of integrated hardware and software with their services and software portfolios," wrote Technology Business Research (TBR) analyst Greg Richardson, in a May 17 report. "By offering hardware and software that enabled the development of virtualized environments, as well as design, implementation and support services, Dell further positions itself as a solutions provider."