Dell sees good corporate PC demand

Tuesday, 5 October 2010 23:15 -     - {{hitsCtrl.values.hits}}

Reuters: Dell is seeing good demand for new personal computers in offices, driven by the popularity of Microsoft’s Windows 7 software, the head of Dell’s large enterprise business told Reuters on Monday.

Steve Schuckenbrock said technology demand more generally was quite strong in Europe, despite Dell having to fight a large installed base that bigger rival Hewlett-Packard acquired when it bought Compaq for $25 billion in 2002.

“EMEA is the battleground,” Schuckenbrock said in an interview in London after the company’s main annual European customer meeting in Berlin.

He said Dell had only about 22 or 23 percent of the key x86 computer-server market in the Europe, Middle East and Africa region, compared with more than 40 percent in the United States, and was adding salespeople to help boost that share.

Schuckenbrock said demand for PCs – Dell’s bread and butter – was strong, even though many analysts have recently cut their PC forecasts, fearing the incursion of new types of devices like Apple’s iPad.

“The refresh is well under way,” he said, referring to the periodic replacement of aging equipment by companies that is often spurred by major new software releases, but which has been delayed this time around by the recession.

“The demand environment is actually pretty good,” Schuckenbrock said, adding that he estimated about 15 percent of the commercial installed base had migrated to Windows 7.

Schuckenbrock said technology demand in Europe and the United States was healthy, even though IT chiefs who wanted to invest in new technology often had to find the funds themselves by cutting costs.

“Generally, it’s relatively positive in terms of technology demand in Europe, and I heard that last week from the customers,” he said. “The same agenda is happening in the U.S.”

Large technology vendors like Dell, HP, IBM and Cisco are pushing to diversify out of relatively low-margin businesses like hardware and become one-stop shops for their clients’ technology needs -- many by acquisitions.

Schuckenbrock told Reuters last month that Dell planned more acquisitions after losing to Hewlett-Packard in a bidding war for data-storage company 3PAR, with targets including, but not limited to storage.

On Monday, he said Dell wanted to exploit the freedom of its lack of legacy IT services to get involved in new, virtual ways of working – possibly by buying young companies.

“We’re not interested in buying yesterday’s networking capability,” he said.

Asked to comment on HP’s appointment of ex-SAP Chief Executive Leo Apotheker as its new chief executive to replace Mark Hurd, Schuckenbrock said he welcomed the fact that Apotheker would have to take a hard look at the business.

“The culture needs a lift, the innovation agenda needs a lift, and it won’t be solved purely through acquisition,” he said. “I think they’re going to have their hands full for a while... While they’re figuring that out, we can keep going.”