Dell: 'Direct model is not a religion'

Servers This newsletter is sponsored by Raritan, Inc. Trade up to the latest KVM gear and save For a limited time, you can trade in your existing KVM equipment (whether it's Raritan switches or not) and upgrade to the latest in KVM-over-IP, expand your Analog Cat5 solution, or move to a hybrid solution. In return, we'll give you great savings plus the latest KVM technology we offer. Click here now for more details on our Raritan Customer Loyalty Program. Network World's Servers Newsletter, 05/10/07 Dell: ‘Direct model is not a religion’ By Jennifer Mears Dell has been suffering through some tough times. It has gotten outplayed at its own game at the low-end as competitors such as IBM and HP – and now Sun – have been eating into its business. And, according to analysts, it has been ousted as the leader in PC sales by HP, which now sits atop that heap. Though Dell beat earnings estimates with its most recent financial numbers, it still reported a significant drop in profits, bringing in $673 million in the fourth quarter, compared to $1 billion during the same quarter a year earlier. What’s more, the computer maker is the subject of an accounting investigation by the Securities and Exchange Commission. Founder Michael Dell returned to the helm of the company in January, replacing Kevin Rollins who had assumed the CEO position in 2004. Dell’s board said Michael Dell’s leadership would be critical to turning Dell around. From servers to storage: Virtualization saves It's touted as one of the fastest and easiest ways to better manage and control your infrastructure. Download this guide today and see how network IT execs are making virtualization pay off in the real world; discover the 8 virtualization gotchas you need to know; and much more. Click here to download. Last week, news reports broke detailing a memo that Michael Dell sent to his 78,000 employees on April 25. In the memo, Dell talks about “profound changes” and “well thought-out risks.” He also alludes to possible acquisitions and even suggests that the direct sales model he built the company on may be on its way out. “The direct model has been a revolution, but is not a religion,” Dell wrote. The bottom line is that sales productivity at Dell needs to be improved, he says. Dell already is the in the process of change. It launched its company overhaul, dubbed Dell 2.0 last year. More recently, it announced it would start selling Ubuntu Linux on its PCs. What do you think Dell needs to do to turn itself around? What technologies or companies would it make sense for Dell to acquire? Should Dell scrap its direct sales model? Let me know.   What do you think? Post a comment on this newsletter

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Contact the author: Jennifer Mears is a freelance journalist based in Arizona. She was previously senior editor at Network World focusing on server issues. E-mail her at jlmears@gmail.com.   This newsletter is sponsored by Raritan, Inc. Trade up to the latest KVM gear and save For a limited time, you can trade in your existing KVM equipment (whether it's Raritan switches or not) and upgrade to the latest in KVM-over-IP, expand your Analog Cat5 solution, or move to a hybrid solution. In return, we'll give you great savings plus the latest KVM technology we offer. Click here now for more details on our Raritan Customer Loyalty Program. ARCHIVE Archive of the Servers Newsletter. BONUS FEATURE IT PRODUCT RESEARCH AT YOUR FINGERTIPS Get detailed information on thousands of products, conduct side-by-side comparisons and read product test and review results with Network World’s IT Buyer’s Guides. Find the best solution faster than ever with over 100 distinct categories across the security, storage, management, wireless, infrastructure and convergence markets. Click here for details. PRINT SUBSCRIPTIONS AVAILABLE You've got the technology snapshot of your choice delivered to your inbox each day. Extend your knowledge with a print subscription to the Network World newsweekly, Apply here today. International subscribers, click here. SUBSCRIPTION SERVICES To subscribe or unsubscribe to any Network World newsletter, change your e-mail address or contact us, click here. This message was sent to: networking.world@gmail.com. Please use this address when modifying your subscription. Advertising information: Write to Associate Publisher Online Susan Cardoza Network World, Inc., 118 Turnpike Road, Southborough, MA 01772 Copyright Network World, Inc., 2007