Dell became Dell by offering PCs to consumers and business customers around the world. But recently, Michael Dell has stood by as his company’s PC market share slipped. Now, Dell is behind HP and Acer, without much of a chance of catching up soon. That’s not a good thing. Michael Dell needs to step aside, so someone with fresh ideas can revamp his company’s core business.
Michael Dell has forgotten about the corporate world as of late. Part of the reason that Mark Hurd was so successful as HP’s CEO was that he sat in on enterprise sales meetings. He also worked closely with VARs. Dell hasn’t been as successful in those markets. And over time, the company’s influence in the corporate world has slipped. That’s bad news for Dell. And it should make the board think twice about its CEO.
Consumers care little about Dell. And it’s partly Michael Dell’s fault. Over the past few years, Dell has done little to appeal to customers that were looking for a more Apple-like experience. And the company’s boring PC designs have caused it to lose ground to HP and Sony, two firms that understand what it takes to build great-looking products. Consumers are important. And Michael Dell has allowed his company to forget about them.
The Dell Streak is a poor alternative to the iPad. Its 5-inch display is too small. It’s running an outdated version of Android OS. And it lacks the flair that consumers and enterprise customers are looking for. It was a mistake for Dell to release the Streak. And Michael Dell, as the company’s CEO, is the only person one can blame.
Michael Dell has decided to follow a mobile strategy that’s unlikely to make Dell a force in that space anytime soon. Aside from its ill-fated Streak, Dell is also offering a smartphone to compete with Apple’s iPhone and the Motorola Droid X. The only issue is, the Dell Aero is underpowered, it’s expensive for what it offers, and it can’t compete with other firms in any way. It’s another troublesome product that doesn’t reflect well upon Michael Dell.
Dell lost face when it attempted to acquire 3PAR. The company was the first to attempt to acquire the virtual-storage firm, but it eventually lost it to HP. Although Dell might have gotten lucky by not paying so much for 3PAR, Michael Dell’s willingness to pay such a premium in the first place was a mistake. And by continuing to bid with HP, he looked even worse.
Speaking of HP, the company is starting to make Michael Dell look bad. Not only did it beat him out for 3PAR, but the firm has also trumped it in the PC space, in the mobile market, and elsewhere. There is a reason why HP has performed so well financially over the past few years and why Dell hasn’t done as well. Hurd and now HP’s management is simply out-foxing Michael Dell.
A few years back, Acer wasn’t as worrisome as it is today. The company was still trying to cement its position in the PC space, and the chances of it trumping Dell seemed slim. But now it’s a huge firm with designs on dominating the PC market. And it could be just as worrisome to Dell as HP. And yet, Michael Dell doesn’t seem to see it that way. All the while, he has done little to stop Acer’s growth in the PC space. That’s a mistake. And it could come back to haunt the CEO.
It’s hard to think that Michael Dell is doing a good job when one considers his company’s financial performance. Yes, Dell is still generating a profit every year, but it’s dwindling. Back in 2007, Dell generated $2.5 billion in profit on $57 billion of revenue. Last year, the company’s revenue declined to $52.9 billion and $1.43 billion profit. That’s not a good thing. And it should be one of the chief indicators for why Michael Dell isn’t doing as effective of a job as he should.
Based on his performance, it’s hard to see why Michael Dell should stay on as CEO of Dell. And yet, he’s still at the helm. Because of his importance to that company, and the way in which he originally ran it, the board is undoubtedly loath to get rid of him. But if anyone else was running Dell, they would have been gone a long time ago. Simply put, Michael Dell has his last name to thank for his current job.