According to Greenbaum, Microsoft has failed to convince its business customers to upgrade from Windows 7 to Windows 8, which led to a drop-off in sales for Dell PCs. Dell is one of the biggest channels for Microsoft’s Windows software and just won a “Partner of the Year” award — but if Microsoft is struggling, that means Dell will struggle, too.
“Companies don’t know if they should be buying touch-enabled laptops, and now laptop buying has stalled,” said Greenbaum. He points to significant weaknesses in the Asia Pacific region, which will cripple demand for both Microsoft and Dell products.
A smarter strategy for Dell involves partnering with (and potentially acquiring) business-focused startups in a manner akin to SAP and EMC.
Michael Dell has already thrown the company into the exploding storage market. He senses an opportunity, given that businesses need solutions manage the explosion of data driven by smartphone and tablet usage.
Michael Dell recently launched $60M fund to support storage startups, an area that Dell believes is ripe for “continuous innovation.” Dell has acquired over 25 young storage companies in the past four years, including EqualLogic and Compellent.
Another area of growth is integration: Dell acquired Gale Technologies in 2011 to help customers extend their current investments and capitalize on new IT models.
[Cloud-based integration is a major topic of discussion at VentureBeat's upcoming CloudBeat conference, Sept. 9-10 in San Francisco. --Ed.]
What’s next for Dell?
Whoever gains control of Dell’s board will face a fight of epic proportions — and it begins with aligning the various stakeholders.
Michael Dell has received the bulk of support, as he’s promising to preserve the company and keep jobs. But Icahn may still have a shot, given that memories of his tough tactics and eventual success with Motorola are still fresh.
For years, Icahn “pushed, prodded, and shouted to shake up” the mobile company, eventually culminating in a sale of Motorola’s handset division to Google. Icahn made off with a pile of cash — as did the shareholders who followed his lead.
But before Icahn commits to another victory lap, Dell needs to commit to a strategy.
Dell’s executive team will decide whether to offer a full-stack software solution that meets the needs of IT, or alternatively, integration software, which as Greenbaum describes “neatly fills the gap.”
Dell CIO Carol Fawcett hinted that the company will attempt to do both. In a recent interview with VentureBeat, Fawcett said Dell would not stray from catering to its “bread and butter”: small and medium-sized businesses. She added that the products can meet each customer’s IT needs — whether it’s a single product or a full solution.
“Dell wants to be an end-to-end solutions provider, a one-stop shop,” Fawcett told me. “But we don’t want to be another Oracle.”