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Where Does Dell Go After Losing 3Par? 169

crimeandpunishment writes "It was the big deal Dell wanted in a big way. But now that it has lost out to Hewlett-Packard in the bidding war it started for 3Par, where does Dell go in its effort to diversify its business and move into the higher-profit area of selling technology to other companies? The company faces significant challenges, largely due to its lower-end focus, and because many of its competitors beat Dell into branching out. One analyst says, 'People see [Dell] as box-pushers'."
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Where Does Dell Go After Losing 3Par?

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  • Dear Dell shitbags: Optiplex GX270 fiasco you went to great lengths to hide which you're finally getting sued for. Enough Said.
  • by RapmasterT ( 787426 ) on Friday September 03, 2010 @03:18PM (#33468468)
    and say unreservedly that Dell can go to hell.
    • Re: (Score:2, Interesting)

      by kenrblan ( 1388237 )
      I really like their server products, but their sales staff, at least in higher education sucks monkey balls. Before I left the higher education IT arena, my university IT group was thinking about doing a big virtualized app/desktop push and was looking to do Citrix or VMware View. My boss emailed our higher-ed representative at Dell to inform him of the project scope and to give them a shot at getting the contract. Dell never called, emailed, or really acknowledged our existence despite having recently won
      • My company recently changed from HP server hardware to Dell, and it's been an absolute nightmare.

        ridiculously long lead times on core hardware
        partial shipments (literally shipping servers half built because parts weren't available) complete inability to produce two systems configured the same way in a row idrac is shit. utter complete shit.

        If I have to troubleshoot and bug check their hardware/firmware ONE MORE TIME, and hear from them "gee, we've never seen that before", I'm going to punch someone
        • iDrac is shit? What part of being able to log in and reboot a computer out of band is shit?
          • by jimicus ( 737525 )

            If it's anything like all their previous DRAC cards, the web interface has this awkward tendency to be so browser-specific that a relatively minor upgrade to your browser can break it, the CLI is so poorly documented they may as well just replace the user manual with a single sheet of paper that just says "Look, we just put this here to fill a line item, we don't actually expect anybody to use it".

            • The Enterprise iDrac lets you see the console even during boot. The command line IS poorly documented but once you work out the commands it is simple to shutdown, reboot, power cycle, or turn on a remote system.
              • by jimicus ( 737525 )

                Much like the DRAC4 and 5 cards then. They provide a Java-based viewer to the console during boot (which I'm 90% certain is effectively a framegrabber and VNC under the hood). The only minor issue is that Dell don't seem to be able to write a half-decent interface to fire up the viewer which isn't horrendously sensitive to web browser versions.

        • Re: (Score:3, Interesting)

          by dave562 ( 969951 )

          I have had an almost identical experience. I have been working with HP hardware my entire career but recently started a new job in a Dell shop. The last two months have been one "Doh!" moment after another. The first issue was when the battery on my Perc controller "failed" (it discharged and had to recharge). The server rebooted and failed to come up. I had the same issue happen a few years ago on an HP Smart Array controller. On the HP box, the driver just logged an error message in the event viewer

  • by Dan667 ( 564390 ) on Friday September 03, 2010 @03:19PM (#33468478)
    and going back to their successful business model would be a good first step.
  • They're looking so 1990s, and a 20-year old image is never good in the computer business.

  • 'People see [Dell] as dishonorable disingenuous box-pushers.'

    There, fixed that for you. There's a few "caps" I'd like to put in Dell's ass, and they know the ones I mean because they have Dell's name on them already.

  • Dell can go to hell for all I care
  • by erroneus ( 253617 ) on Friday September 03, 2010 @03:32PM (#33468698) Homepage

    Let's put it this way:

    Apple charges a lot more money for its products and they still sell a lot of them. It's not the price that makes Apple successful.

    Dell built its business on customer support and service. While it's quality has more often been pretty good, it has remained more or less on par with its competitors. What makes them better is their support and service accessibility.

    Sad thing is they started sending all their call centers out of the U.S. and they wonder why they started losing business? "Everyone else is doing it" was the wrong answer in the case of Dell. I remember when the change was announced. Many business customers started leaving Dell immediately before Dell did an about face on it. Still... they did it anyway... just slowly and quietly.

    So, "so-so" to good quality, and a pretty decent online database for machines and a not-difficult means of getting device drivers and such.

    If Dell wants to rally, they need to bring their support BACK to the U.S. That will be the only way they will be able to differentiate themselves. And if they cost a bit more, I don't think people will mind so much.

    • Re: (Score:3, Insightful)

      by phantomfive ( 622387 )
      I, for one, am not willing to pay extra for support in the US over India. The only time I ever need to call tech support is if it breaks and its still under warranty. I don't call tech support to ask technical questions, because they can't answer them, whether they're in the US or India. I'd rather get a cheaper box than pay for tech support in the US.
      • Re: (Score:3, Insightful)

        by erroneus ( 253617 )

        The vast majority of people are still not technical. They learn new tricks here and there. They learn the meaning of a few buzz words. But when it comes to support, they simply need it and will pay to not have to deal with someone in a foreign nation with a difficult accent. (Hey India... wanna take over? Stop speaking Hindi!!) And seriously, people will pay a lot of money in order to not have to learn something new. This is why the geek squad is so popular with so many.

    • Re: (Score:3, Interesting)

      by aztracker1 ( 702135 )
      I'd consider dell again, even pay a $100 more per machine if I could get a U.S. support person (guaranteed)... I was searching for a new laptop earlier this year, and wanted a premium laptop... I was fairly happy with my netbook's form factor, but wanted something a bit faster, that could handle 4-8GB of ram, and fast enough to run a couple of VMs... I liiked at the Alienware M11, and even had one ordered, but decided to cancel as I felt the Dell Adamo (I know Dell == Alienware now) was a better fit for my
      • Adamo is a good choice for small form factor and good power. Also look at any of the 13" Latitude series. I like Latitude because I can get business level warranty support options like accidental damage coverage which is REALLY important to me. I'll never forget the time, two weeks to the day after I brought my brand new Latitude D830 (maxed out in every way including the video... I love my 1920x1200!) I spilled apple juice on it. I thought I had cleaned it up well enough... it turned back on just fine.

    • While Dell has foreign call centers and they did have a rough go of it early on, it seems to me that they have that largely resolved. If you are willing to be even modestly polite (I know difficult for many Americans, always determined to prove their cultural "superiority"), you can get quick fast service. This is no longer a problem. However, with HP, you'll be luck to talk to a telephone server machine that won't send you into phone hell or simply just hang up on you, if you can even find a phone numb

  • by ihavenospine ( 541249 ) on Friday September 03, 2010 @03:33PM (#33468706)
    After losing 3com and 3par to HP, they always can try with 3M.
    • Re: (Score:2, Funny)

      by mkiwi ( 585287 )

      Not to be overly pedantic, but 3M is twice as big as Dell in terms of market cap. I have used Scotch tape to hold Dell computers together, so maybe that's a valid investment the other way around...

  • Not worth it (Score:3, Insightful)

    by jmoen ( 169557 ) <{jmoen} {at} {}> on Friday September 03, 2010 @03:33PM (#33468710) Homepage

    3Par is not worth it, HP is just being bully and want to get rid of the HD partnership so they can push their own storage.
    For Dell and their customers this is a relief as they would have burned a lot of their cash reserves, now HP have. 3Par was impressive yesterday tomorrow somebody else will show how storage should be done.

    • Your probably right. The premium they paid will have HP customers picking up the slack in their profits via higher prices and poorer service for some time to come as they digest this thing. Perhaps Dell did itself a favor by bidding it up and letting HP get indigestion over the purchase. Too often takeovers are more about eliminating the competition than actually improving their business in the face of competition.

  • They're making billions as box pushers, isn't that good enough?

    • Re: (Score:3, Insightful)

      by AntEater ( 16627 )

      No. Their shareholders demand that Dell produce an ever increasing value to the company - forever and ever. They have to get bigger or the stock value will decline and the CEO's options will not be worth enough.

      • Re: (Score:2, Informative)

        by Anonymous Coward

        No. Their shareholders demand that Dell produce an ever increasing value to the company - forever and ever. They have to get bigger or the stock value will decline and the CEO's options will not be worth enough.

        Actually many stock options are crafted in such a way that any dividends paid will be treated as notionally received by the CEO and reinvested in stock, so this is not so much of a reason. A better reason is that public companies no longer believe in paying dividends. The rationale nowadays is that you own a stock in the hope that it will go up in price so you can make money by selling it to someone else... who will presumably be buying it in the hope that further down the line they can find someone else t

      • FWIW, this situation is a direct consequence of congress making laws in the early 80s that encouraged tying CEO compensation to stock price. They thought somehow it would fix things if CEOs got paid in stock instead of in cash. Now CEO compensation is so complicated, the laws surrounding it, you need a special consultant whose entire job is to figure out how to pay CEOs.

        Many investors are happy to have a company that consistently pays dividends, and grows at roughly the same speed as the economy. In fact,
    • by MightyYar ( 622222 ) on Friday September 03, 2010 @03:54PM (#33469058)

      They're making billions as box pushers, isn't that good enough?

      If they paid dividends, maybe.

      Since they don't, they are expected to grow. And grow they have not.

      Technically, they've roughly doubled their revenue in the last 10 years, but their net income has been flat or declining.

      If you are an investor, you have other choices in the growth game - like competitor Apple with their 10x revenue growth and corresponding net income growth. Or HP with their 3x revenue growth and significant net income growth.

      They are being out-grown by their competitors. If they aren't in that game anymore, then they need to issue a dividend and compete for retiree money.

    • They're making billions as box pushers, isn't that good enough?

      No. Every publicly traded company is expected to grow. If the Dell's market is saturated and there are limited growth opportunities there then Dell will have to find new sources of revenue outside their traditional business. This becomes VERY hard to do when a company gets as big as Dell. It gets absurdly hard when a company is as big as GE. Dell made about $50 billion in revenue last year. To grow the business by even 5% (which would be considered low) Dell would have to find $2.5 billion in new reve

      • I actually used to work for a GE Medical reseller, I also know people who work for GE Aircraft Engines and for GE Appliances.

        I agree with your assesment, but is it correct to compare GE to Dell?

        GE is a conglomerate. They are a business of many businesses. Their corporate policy is to cut the bottom 10% every year and reinvest in something else. They are spread across many diverse markets and industries and service sectors.

        Dell is an IT company. While IT is vast, it comes down to selling computer hardware, n

        • I agree with your assesment, but is it correct to compare GE to Dell?

          For the point I'm making (that top line growth is very difficult for large companies) sure it's a valid point. Keeping a consistent percentage growth becomes harder the larger a company gets. This is true irrespective of the specific industry a company is involved in.

          GE is a conglomerate.

          Which carries it's own set of burdens. GE is run amazingly well but it's very common for the component companies of conglomerates to be worth more as independent companies. More than once the question has been asked if GE would be more valu

  • Sorry SuperMicro, but you could use a bigger umbrella.

    So, Dell: Buy SuperMicro

    Also, Dell, you need to make some serious inroads in the backend service arena. There are several dozen cloud service and storage business starting up every week. Buy two or three of each. Three billion Dollars should go pretty far in this arena.

    Split the software and services from the hardware. While you're at it, buy or invest heavily in implementation and sales engineer forces.

    Once all the divisions are established, take so

  • by fuzzyfuzzyfungus ( 1223518 ) on Friday September 03, 2010 @03:37PM (#33468780) Journal
    Does "faces significant challenges" mean "Is no longer capable of satisfying the bloated expectations of parasitic wall-streeters because it basically just produces an unsexy commodity in quantity, like steel or potatoes" or does it mean "is seriously fucked because corporations will only buy if they can get a "total enterprise solution" from one company, by cutting a single PO?

    The former seems like a largely perceptual problem. Earth to investors, not every industry segment can double its profit every quarter forever, and if it can, it is probably a scam. Civilizations are built on largely low-margin commodities. Cement, steel, sulfuric acid, corn, potatoes, x86s. Go find a Ponzi scheme if you can't deal with that.

    The latter, though, seems like a real issue for Dell, one that could seriously impact their mid to long-term viability.
    • Is no longer capable of satisfying the bloated expectations of parasitic wall-streeters because it basically just produces an unsexy commodity in quantity, like steel or potatoes.

      Wall street has no problem with low margin commodity type companies. They just expect them to describe themselves as one and to act like one, not to pretend that they are still a growth company when all that differentiated them has come to pass.

    • "Is no longer capable of satisfying the bloated expectations of parasitic wall-streeters because it basically just produces an unsexy commodity in quantity, like steel or potatoes"

      Actually, many investors are perfectly happy with companies that just continue to do something simple, well. Dell is losing its allure because their service has begun to suck balls, they've forgotten what the business is about, they treat customers badly and with contempt, and provide poor service with the attitude that customer

  • by oldhack ( 1037484 ) on Friday September 03, 2010 @03:39PM (#33468818)
    We are going 5PAR.
  • I Like Dell (Score:4, Funny)

    by Ngarrang ( 1023425 ) on Friday September 03, 2010 @03:46PM (#33468930) Journal

    I buy Dell computers from the refurb market. They are cheap and plentiful. I love 'em! I have nearly 150 small form-factor systems and laptops. Because of the indecently low cost I get them, I keep spares on the shelf. I don't fix them, I just swap the HD to another box. The parts are easy to swap in and out and I have experienced a high level of up-time with all of my systems. GX150 were the first systems, then up to GX260/270/280. Now that those systems are leaving the refurb market, moving up to the GX520/620. There is nothing wrong with being a box-pusher. Someone has to make the boxes and that I will eventually buy off refurb.

    • Why is this modded funny? It is exactly right, and exactly why very large companies buy from Dell. The massive discounts they get from box pushers's corporate solution means that if something is wrong with a laptop it becomes disposable. I had the problem with one of my laptops at work. I dropped it and the corner and PCMCIA slot cracked. Mostly case damage but I did need the PCMCIA slot so I asked IT if they can get it fixed. They just replied they simply won't bother, bring in the laptop so they can swap
  • But for buying Dell? You'd might as well start cleaning out your desk before you hit the order button.

    • by butlerm ( 3112 )

      They must be doing something right. The colocation center where we have our Sun boxes hosted is about 80% populated with Dell rackmounts.

  • There is nothing Dell can do, that another company cannot do better, whether it's top end cloud infrastructure, sophisticated software and servcies, top end personal hardware, or low end hardware. Dell no longer has a selling point, and it'll keep going downhell until it finds one.
  • To create new products and innovate in markets you need Research and Development. You can't be a me-to follow on that wins with low manufacturing costs. R&D requires a different mindset and a whole new way of planning. It means risk taking but balancing the risk carefully with planing and strategy to correctly evaluate and drop things that are not going to work as well as properly spend on the high quality part where it is needed.

    • To create new products and innovate in markets you need Research and Development.

      You don't have to have in house R&D but if you don't you do need the cash to buy companies that do R&D. Cisco is actually a good example. They do some internal R&D but they acquire a lot of companies specifically for the products they develop. R&D doesn't have to be in house but if it isn't the company will have to acquire it. Dell has $10 billion in cash so they should be able to acquire technology. However Dell doesn't have a ton of in house expertise in M&A activity either (merge

  • I believe they go into a room and high five each other, cause they just conned HP into paying an absurd amount of money for something they didn't really need.

  • Dell could go after Compellent... very similar to 3PAR. CML stock has almost doubled since the start of the 3PAR acquisition. Compellent has a very similar feature-set to 3PAR arrays and Dell could pick them up for about 750M.
  • by salesgeek ( 263995 ) on Friday September 03, 2010 @04:10PM (#33469284) Homepage

    Dell always was a low cost knock-off product. They were never innovators, and never developed a real R&D function in their company. They basically sold the same thing as the other guy, except for less money. The difference is that HP, IBM, and for a while, Compaq would create products that Dell did no have at all (there was a time where you could get servers from IBM, Compaq and HP, but not from Dell). Dell would wait until the component manufacturers would have the commodity parts (depending on market size that would be weeks, months or a year or so) , and then would bring a less expensive machine to market. For desktops, since Intel provided chipsets and reference boards, there was no lag, and often Dell was quicker than others to put the latest CPU in a desktop. HP, IBM and Compaq had to finance building machines in advance and shipping them to resellers. Dell would take orders this week, and make and ship the PCs next week. This practice worked in Dell's favor as components would drop in price, allowing them to lower prices faster than their "channel bound" competitors.

    Ironically, the last of the big 80s and 90s PC makers is Apple, who has continued to invest in R&D, still has a big channel (even though they have retail stores) and is using their ability to create new products (iStuff) and/or superior products (Mac) to extract very healthy profit margins from a recession market. Dell wants some profit, but is stuck being the low cost leader and doesn't have the internal resources to fix the problem, and their friends in Redmond aren't exactly producing the electrifying new software that makes people want a new PC.

  • Compellent (CML) and Isilon (ISLN) that has storage virtualization technology?
  • How about taking the $1,500,000,000 they were going to give 3Par shareholders (to get 3Par and 350m cash) and give it to Equallogic engineers instead to design a 3Par competitor. Maybe tout for a few Google hardware people and wait out their non-compete but keep Equallogic in its current arms-length form to prevent Dellification of the final product. Why not boost R&D in the US rather than giving venture capitalists a pay day.

    It's one thing when you don't have the cash or engineers to roll your own.

    • This is not a bad idea, but Equallogic doesn't really have product offerings at the level. They might be able to, eventually, but it would take time to do and more time to build the reputation/

      That said, commoditization of storage may make 3PAR et al irrelevant. It's getting progressively more difficult to justify the cost of first-tier stuff when Equallogic et al give you almost as much performance and reliability for a hell of a lot less money. You have to really need the features the more advanced arr

  • Oh man, I smell me some paid shrills. Dell has issues but lets look at HP for a second. HP just forced out their CEO. Not good. Then HP killed all server sales they were getting through Cisco. Cisco now exclusively sells IBM servers. They used to sell HP. Cisco is out for blood too with HP. They want them out of business. HP wants Cisco out of business. THAT is not going to happen. Cisco has the enterprise on lockdown. Then HP turns down business left and right. If they find out you sell Cisco or Dell they
    • HP built the platform to put that idiot in the United States Senate, as if that body didn't have enough problems.

      • First off Fiorina is not in the senate yet and second off the person she is looking to replace is a million times worse.
    • by butlerm ( 3112 )

      Don't you find it ironic that while everyone else you accuse is complaining about customer service issues and the like, you bring up a long list of factors that almost no one except spectators and speculators actually care about?

      Trying to push Cisco out? Forced out their CEO? Strange reseller practices? Unless they are in danger of going out of business, most customers couldn't care less. Customer service, quality, reliability, longevity, device drivers, support, service information, replacement part avai

  • Not only Dell ... (Score:3, Insightful)

    by ScrewMaster ( 602015 ) on Friday September 03, 2010 @04:55PM (#33469800)

    One analyst says, 'People see [Dell] as box-pushers'.

    Those of us who have been engineers for a while are disheartened to see Hewlett-Packard in the same light.. Dell has always been Dell, but HP was once truly a company worthy of respect.

    • by butlerm ( 3112 )

      The higher end HP stuff seems to be pretty good. Not as good as it used to be, but certainly respectable. It is the "consumer" grade stuff that is worthless.

      I like to blame all that on the merger with Compaq, which had a reputation for putting out really bad entry level hardware in the early 90s, but I don't know who there is really responsible for polluting a respectable brand with self destructing consumer equipment.

  • It would give them a damn fine direct sales force and a way to sell Dell servers into the enterprise -- No, I don't work for them. Frankly, I doubt if they can afford them ($2.5B plus 80%), but, in reality, they can't afford not to have them either.
  • 3PAR. This was supposed to be Dell's answer for being SUB-PAR.

  • Just be a really good box-pusher.

Today is the first day of the rest of your lossage.