Dell Confronts Problems, Focuses on New Direction

By Scott Ferguson  |  Posted 2007-04-30 Email Print this article Print

News Analysis: Dell has been showing that it can still innovate with SSDs and Ubuntu Linux desktops, while also showing that it's willing to reconsider everything—including its direct sales model.

The news coming from Dell headquarters is clear: It's time to forget the past and start reinventing the company before its too late.

Since returning to the CEO's chair on Jan. 31, Michael Dell has made no secret of trying to push his struggling Round Rock, Texas, company in a new direction to help stop the bleeding that has claimed its once dominant share of the PC market and brought uncomfortable questions about its accounting practices.

On the technology front, Dell has begun to refocus its energy on the customer—whether an enterprise commercial client, small business or the person just looking for a home PC—in order to show that its can still be an innovator. In recent weeks, the PC vendor has offered some laptops with the latest in SSD (solid state drive) technology, told customers that it will offer PCs with both Microsoft's Windows Vista and XP and decided that its time to offer a Linux desktop.

The most dramatic news came April 27, when Reuters and several other news organizations reported on a leaked memo from Michael Dell to employees. Part of that memo took aim at the company's direct sales model, noting that direct sales to the customer was a revolution, "but it is not a religion."

For some analysts, these developments, both on the technology side and on the marketing end, are a sign of more changes to come.

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