Six years ago, Dell was the world’s leading manufacturer of personal computers. Earlier this week, with the help of private investors, Microsoft, and his own personal fortune, founder Michael Dell took his company private as he attempts to retool his business in an attempt to survive the rapidly changing computing environment.
Unfortunately, many are asking if Mr. Dell may have waited too long to make a strategic changes to his business model. As the New York Times wrote in their DealBook blog, while Dell remains somewhat healthy in the server space with just over 20% of market share, it is under intense pressure from Chinese and Taiwanese competitors who produce desktop and laptop computers at smaller profit margins than the Texas based company. In addition, the continuing rise of tablets and mobile devices has put a huge dent into the sales of the entire PC industry.
For CIOs and corporate buyers, however, Dell’s struggles could be an opportunity to demand significant discounts on new hardware purchases, and no-cost extensions of maintenance services on existing equipment.
Technology analysts and CIOs speaking to the Wall Street Journal indicate that while there are concerns with the stability and long term viability of Dell, purchasers are in a strong position to negotiate better pricing for Dell equipment and services in the short term while the company works towards figuring out how it will compete in a world full of iPads and Chromebooks.