Dell CEO Michael Dell on Wednesday said the company remains committed to its PC and mobile device businesses, saying it will provide savings that could help grow the enterprise business.
There are economic benefits as the PC business plays a role in acquiring enterprise hardware at cheaper rates, Dell said at the Dell World event being held in Austin, Texas. Close to 95 percent of the disk drives, memory and processors acquired go into PCs, and buying those components in volume helps build commodity hardware servers at lower costs.
"From a cost standpoint, you get enormous scale," Dell said.
Dell mostly builds its servers around x86 microprocessors from Intel and Advanced Micro Devices. The company is making a larger push into the enterprise by building its software, hardware, networking and services portfolio, and the company has no plans to give up its PC business, Dell said.
Dell's comments came as HP reportedly mulls over the idea of keeping its PC business. HP in August said it will spin-off or sell the Personal Systems Group, which deals in PCs and mobile devices, in an effort to focus on the higher-margin enterprise business. A final decision on the PC business from HP is expected by the end of this month.
The profits of many PC makers have been hurt by razor-thin margins, which was one reason HP cited for dumping its PC business. Dell has been preying on that uncertainty, saying that HP's indecision has provided an opportunity to gain new customers.
Dell's focus is more on margins gained from PCs than the volume of shipments, Dell said.
Once known as a direct-sales consumer PC provider, Dell has been building its product portfolio to become a competitive enterprise services provider. Over the last few years Dell has made some key acquisitions including services company Perot Systems, storage companies EqualLogic and Compellent, and networking firm Force10 Networks to build up its intellectual property portfolio and technology stack. The company is also building data centers to host cloud applications and research centers to create reference architectures for cloud applications.
PCs, smartphones and tablets are also augmenting server usage, Dell said. Server usage relies on the core computing taking place on mobile devices and PCs which are approaching 2 billion units worldwide, Dell said.
The company is also forging ahead in the smartphone and tablet businesses, and plans on releasing new devices based on Google's Android and Microsoft's upcoming Windows 8 operating systems, said Steve Felice, president of the consumer, small and medium business at Dell, during a question and answer session with the media and analysts.
Felice didn't announce when Windows 8 devices would be released but said there is a lot of excitement around the OS. He was a little more cautious about Android, saying the OS was successful on smartphones, but not as much on tablets.
Dell to date has released Streak tablets in different screen sizes and some smartphones based on Android OS. The products have been considered a failure, but the company is building up alliances and partnerships for future devices to be successful, Felice said.
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