Dell’s Transformation – Final Assignment CNAS
A New Dell Emerges (2009-2012)Dell gets serious about ramping its solutions skills and capabilities with organic and inorganic investments in key intellectual property and talent. By 2011, the company has its best solutions portfolio ever and celebrates the largest single-year revenue increase in company history.
2009
• We acquire Perot Systems and launch a new business called Dell™ Services that gives customers end-to-end IT services to help lower their total cost of IT ownership.
• Dell enters the smartphone market with the Mini 3i from China Mobile.
• Customers rank Dell x86 servers, corporate laptops and desktops No. 1 in enterprise customer satisfaction.
• We introduce Adamo and Latitude™ Z laptops — both the world’s thinnest laptops — for consumer and business users who demand design, innovation and functionality.
2010
• Dell acquires key IP in storage, systems management, cloud computing and software: Boomi®, Exanet, InSite One®, KACE™, Ocarina™ Networks, Scalent™ and Dell
Compellent®.
• Dell is the No. 1 healthcare information technology services provider in the world according to Gartner, Inc. and wins more than 300 industry awards in 2010.
• We accelerate our enterprise customers’ move to the cloud with Dell Virtual Integrated Systems solutions, based on open architecture solutions that focus on interoperability and extending the legacy investments of our customers.
• Dell enters the tablet arena with the Streak, a 5-inch device designed to provide the best on-the-go entertainment, social connection and navigation experience.
• Newsweek names Dell the greenest company in America.
2011
• We celebrate a record-breaking fourth quarter with double-digit growth in the strategic enterprise solutions and services space, and the largest single-year revenue increase in
company history.
• We acquire Secure Works, RNA Networks and Dell Force10 Networks, leaders in enterprise solutions and services.
• Further proof of our commitment to providing end-to-end IT solutions for our customers, we commit $1 billion to develop Dell data and solution centers around the world and open R&D centers in Israel and the U.S.
2012
• We establish a new software group and focus on four key growth areas: end user computing, enterprise solutions, software and services.
• We continue to invest to meet customers’ end-to-end IT needs by acquiring AppAssure, SonicWALL, Clerity, Make Technologies, Wyse, Quest, Gale Technologies and Credant.
• For the first time in company history, Dell begins paying quarterly cash dividends to shareholders.
• Dell is among the first to market with touch-enabled Windows 8 devices which combine an exceptional user experience with the security and manageability companies need.
• Industry analysts recognize our strategic evolution and strength in PCs, the data center, software and services. Gartner positions Dell as a leader in 11 Magic Quadrant reports
Making history again
Now a private company, Dell accelerates its long-term growth strategy and focuses with a single-minded purpose on customers.
2013
• Michael Dell and private equity firm Silver Lake Partners buy back Dell from public shareholders to accelerate our solutions strategy and to focus on the innovations and long-term
investments with the most customer value.
• We continue to invest in our strategy with the acquisition of award-winning enterprise cloud management software and services provider Enstratius.
• We are No. 1 in worldwide PC monitor shipments for the first time in six years.
• Our new PowerEdge VRTX racks up industry awards including ‘Server of the Year’ by PC Pro. It’s a cloud-in-a-box that brings enterprise-class capabilities to small businesses and remote offices.
• Dell launches a brand new, customer-inspired tablet family— the Dell Venue.
Assignment
Read the above summary article which describes how Dell has driven its transformation in recent years. Throughout the course, you have learned about various sides of Dell’s business. Imagine that you have a cash balance of approximately $10 billion. Please prepare a 15
minute presentation in groups showing how Dell should spend this available cash. You have the full freedom of allocating cash in any way you see fit. There may be several investments, internal or external and not all cash needs to be invested.
Please consider (and refer to) any of the topics covered in the course, which you deem relevant. A list of lectures is provided below:
• DELL evolution
• From production to solutions
• Customer experience
• DELL culture
• DELL brand and social media
• Managing remote teams globally
• Global trends in IT industry and how DELL is following
• Shared services centers world
• BRIC power - emerging countries and DELL strategy
• DELL M&A strategy globally
Additionally, every team needs to prepare at least 3 short questions for the other teams, which will be asked and answered after the other teams’ presentations. Each question needs to be answered by a different member of the presenting team (unless there are more
questions than team members).
Answer Criteria
Students should consider the following:
1. Not all cash can and should be spent
2. Strategy – investing in some of the focus areas i.e. acquisitions in the solutions space, investment in internal R&D or any other relevant topic
3. Would the cash investment have a benefit on the customer experience? The
Students need to consider the customer view in their answer.
4. Corporate culture – consider impact of culture when doing acquisitions, possibly also a requirement of change in culture due to increasing focus on internal R&D
5. Students could also suggest investing in the building of the Dell brand – any suggestion should be relevant and linked to Dell strategy
6. Managing remote teams – no specific impact on the investment. Possibly a topic in R&D, where remote teams may not be the best option. Also, creating virtual teams incorporating long term Dell employees and new employees from an acquired company may cause problems.
7. Global trends – the strategy is linked to global trends. However, Dell may ignore some trends (like smartphones), so students may point this out or suggest some other trend that was not considered. Any investment suggestion should be linked to current Dell strategy or an emerging IT trend, which Dell is not focused on at the moment. It would be good to also provide some reasoning for following such a trend e.g. “The emergence of cloud computing creates a great opportunity for Dell to offer an end-to-end solution providing hardware, software and services. Dell could also focus on creating cloud computing centers and lease capacity (known as
infrastructure-as-a-service.” Or “IT-as-a-service”)
8. BRIC power – Students can incorporate some statements around BRIC countries. It would be best to combine arguments using also overall Dell strategy and/or current strong IT trends e.g. “The number of Smartphone owners in China is increasing rapidly as well as the number of affluent people and therefore this is a growing unsatisfied market, which Dell should focus on.”
9. Dell M&A – Students obviously should identify further acquisitions as one way to spend Dell’s cash. However, the possible targets or target industries should be presented with some sort of reasoning. They may well complement Dell’s portfolio, be in line with Dell strategy or possibly an outside-of-the-box idea. There is no right or wrong answer, but the reasoning why to pursue this specific opportunity needs to be clear.
