I was interested to read a recent story on ComputerWeekly reporting a speech Michael Dell gave at the Dell Technology Camp in Paris outlining his plans for the company.
As far as I’m aware, this is one of the first times the founder of the newly-privatised business has talked about what he planned to do with it over the coming years. Dell said the company was “primarily focused on the commercial space where people move from Win XP to Win 7”. He added that “Win RT was a mistake and we are all done with RT. Win 8.1 looks a lot stronger”.
Aside from a bizarre unwillingness to use the word Windows, you have to say that nothing he said was particularly controversial. The good news for the channel was that Dell seems to have no plans to go back to his direct sales origins. “Our partner programme has grown to 35% of our business,” he said, “which expands our reach, and we are investing in our own systems to make it easier to do business with Dell.”
I would have a minor issue over whether the statement regarding systems that make it easier to do with business refers to channel partners or customers because if it’s the latter that might cast a little cloud over his preceding comments. But given that Dell said the big opportunity for the company was to target organisations with 100 to 5,000 users, you have to think there’s a big role for the channel there.
Short-termism
Anyway, perhaps of more interest in terms of the overall direction of the company (at least on the surface) was Dell’s view of the implication of its re-privatisation on strategy. “In the US there is an affliction of short-term thinking,” he said. “Public companies have an 89-day planning cycle and have to constantly adapt their plans. We can have a five-year plan and we have a plan to accelerate our strategy to expand R&D to build solutions for the long term.”
He’s right, of course, but that doesn’t necessarily mean he’s right. Yes, a lot of companies are forced to adopt an 89-day planning cycle because of the burdens of quarterly reporting of their financials and the need to keep shareholders happy. But just because the company has been re-privatised, that doesn’t mean Dell can adopt a five-year strategy even if it wanted to.
In his speech, Dell made a point of stressing that although the company was a partner with Microsoft, it also had Android and Ubuntu systems. He added the company was growing the client business and had already built an enterprise business beyond the PC with virtual clients and tablets.
All well and good, but the reason I’m sceptical over Dell’s ability to implement a five year plan (any five year plan) is that it is dependent on the strategies of others and some of those, such as Microsoft, have got their strategy wrong over the past five years. Remember what Dell said? “We think Win RT was a mistake and we are all done with RT.” That’s just one of them. In fact, you could be forgiven for thinking that very few companies nowadays have a five-year plan for the very simple reason that they can’t deduce with any level of certainty whether the IT market will evolve to fit their plan.
The other problem for Dell is that while it may well be freed from the 89-day planning cycle, many of the other companies it relies on for the technologies that will help drive its strategy and build its products are not.
So I’m not convinced Dell will enjoy much more “freedom” as a private company than it would as a public one. Most of the detail of the company’s business and performance that Michael Dell covered in his speech to Paris could have been delivered to the same audience even if it hadn’t gone private. In many ways, Michael Dell will keep doing what he’s always done, only better (hopefully). The main difference is that he won’t have the distraction of the Wall Street chorus telling him what he should or shouldn’t do every 90 days.
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