Have you noticed that it's just not so cool to be in the PC business these days?
Granted, it's been no secret that the PC industry has been taking it on the chin for more than a year. With a down economy and people excited about new, smaller devices like tablets and smartphones, companies and individual consumers simply aren't spending as much money on desktops and laptops these days.
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And just a little more than a year ago, Hewlett-Packard, which still clings to the moniker of top PC maker worldwide, announced that executives were considering selling its PC manufacturing business. While HP later decided to keep the business, the possibility created a major stir in the industry.
Now this week, Michael Dell, founder and CEO of Dell, said during a conference sponsored by Fortune that the "new Dell" really isn't in the PC business anymore. That's a pretty surprising statement from the man who runs the fourth-largest PC manufacturer in the world.
That's right, Dell may be slipping in the PC market rankings but it's still in the top five. And it's been in the PC business for the past 28 years. As recently as 2011, the company was the number two PC maker, right behind HP. But then it was surpassed by rankings-climber Lenovo and then it also was passed by Acer.
And from what Michael Dell had to say this week, the company may not be looking to scramble its way back up the rankings.
"Well, in the last five years or so, we've really made a concerted shift in our business towards end-to-end IT solutions," said Dell, when asked about a comment he had made earlier that the company is really not a PC company anymore. "And if you think about the businesses that Dell is in today, there are really four of them. Certainly, we start with the client business, which is kind of transforming with all the things that are going on in mobility and client virtualization," he said.
But after quickly mentioning his client-based business, Dell went on to talk more at length about the company's enterprise data center, server, storage, software, services and networking business. Dell went on to add that about half of the company's gross margin does not come from PCs. He didn't respond to the question of how much of the company's margin might come from PCs five years from now.
Dan Olds, an analyst with The Gabriel Consulting Group, said, "Dell is in the process of remaking themselves. Sure, they'll still sell PCs, but they'll sell a lot of other things too."