Dell reinventing itself, but support issues linger

Its efforts have been positive, but some users still have doubts

Dell's efforts to reinvent itself this year through a dramatic break from its direct-sales model, expanded services and new enterprise offerings have shown positive early results, but some users have lingering concerns about supply chain management and support -- long-time issues for the company.

Weathering an accounting scandal and a slump in profit, founder Michael Dell reclaimed the helm of the company after CEO Kevin Rollins resigned in January, quickly replacing top managers and in May announcing plans to lay off 10 percent of the company's workforce.

For years, Dell was the top PC vendor in the world, an acknowledged master of logistics in a business where margins can be razor-thin. It was efficient enough to keep prices low to ward off competition without suffering big setbacks in profits. But by 2006, when Hewlett-Packard unseated Dell as global PC leader, that was no longer the case.

Dell's plans to regain its former dominance have resounded in the market. The company's third-quarter results, announced two weeks ago, showed profit increasing year over year, and record revenue of US$15.65 billion. During the company's earnings call, Michael Dell said the company will put products on more retail shelves worldwide while also helping business customers "simplify IT" and reduce maintenance costs via customized hardware, software and services.

The company has also moved to put accounting issues behind it, recently completing an internal investigation and restating its financial results from fiscal 2003 to the first quarter of 2007.

The company has been making an effort to build relationships with customers and partners and deliver products that are easier to deploy and manage, said Charles King, principal analyst at Pund-IT.

Last month, Dell introduced a two-tier channel program designed to give partners better access to Dell's training, marketing, certification and online resources. The program will provide a better chance for Dell to interact and understand its partners' needs, the company said.

"The company seems to recognize that it has bridges to enhance with customers and partners in the channel. It's not something that's going to change overnight," King said.

After years of success selling PCs directly to users, the consumer business' direct-sales business model hit a wall as component prices fell, Pund-IT's King said. The strategy to simplify IT is a play at small- and medium-size business and enterprises that will help Dell deliver better returns in the long term than its lower-margin direct consumer business, analysts said.

However, some customers continue to have concerns about the company's support and supply chain issues.

Dell is having supply shortages and can't get its servers and OptiPlex desktops to individuals and small businesses in a timely manner, said Josh Kaplan, who runs a franchise of computer support firm Rescuecom and purchases parts and interacts with Dell on behalf of customers.

"You can acquire all the technology you want, but Dell will send hardware out blindly," Kaplan said. It will be a challenge for Dell to deliver what it calls "IT in a box" -- its terms for packages of products and services -- to SMBs and enterprises, Kaplan said. Dell has traditionally delivered mostly standardized systems, Kaplan said. While Dell has built systems-to-order by letting users select from a menu of options, it does not have in-depth experience offering customers services over the lifecycle of products, he said.

Jeremy Cole, owner of Proven Scaling, a small consulting firm with offices in the U.S. and U.K., said Dell has internal staffing issues that affect its support services.

"Dell's sales structure is really strange. They tend to bounce your company around to a new account representative every few months, who are wildly differing in experience, intelligence, and understanding of the Dell sales system," Cole said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Cool Tech

Breitling Superocean Heritage Chronographe 44

Learn more >

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?