Microsoft has gotten analysts debating if its tablet Surface is indeed an iPad-killer, but the secrecy that shrouded its biggest bet yet is also risking the trust of long-time partners including PC-maker Dell, which barely had three days notice from the developer ofWindows operating system.
“It is hardly ideal,” Steve Felice, president and chief commercial officer for the $62-billion Dell, told ET. “But this is the way it is in the technology industry, where the rules are constantly changing.”
The release of Surface comes at a tricky time for the US-based technology giant. Traditionally reliant on computers and other hardware for a majority of its revenues, the firm has spent the last five years morphing into a broader solutions firm, buying some 18 companies in the past two years as part of this transition .
Inevitably, it will have to compete with companies it once partnered with, he adds. “Microsoft is a good partner. It has talked about its intention to be consumer-focuse . We intend to have commercially-focused tablet products at the launch of Windows 8,” he said. In other words, Dell, once a computer-maker for the masses, is shifting its strategy to focus on enterprise customerswith its tablets , where profitability is higher.
“Windows 8 is an important inflection point for touch computing. Apple, which dominates the consumer tablet market does not have all the answers commercial CIOs want for critical issues such as wireless connectivity or wireless printing ,” Felice says. And, despite the massive popularity of Apple’s products, he contends that eye-catching form factor as the main USP of this category may no longer hold. “I think form factor is becoming a non-issue ,” he says.
Since retaking control of the company that bears his surname, founder Michael Dell has made a series of moves to transform it into a global technology powerhouse, on the lines of an IBM orHewlett Packard. While the firm has made some gains-the markets have been harsh on the firm-Dell’s value has halved on the bourses, since Dell wrested control back from former CEO Kevin Rollins in 2007. Despite this, Felice, who previously ran the Asia-Pacific business for the firm, says the firm is committed to its latest re-invention .
“We are happy with the pace of change, but this will be a long-term transition,” Felice says. In January this year, Dell decided to combine the sales and go-to-market operations of its four large business units into one entity as part of this re-orientation . Muted technology spending by its large corporate customers and rapidly changing consumer needs have stumped vendors such as Dell.
If corporate CIOs have kept a tight hold on their purses, consumers have switched loyalties to computers and tablets from Apple at the top end and cheaper rivals such as Lenovo in the mass market. Dell has found little sympathy from investors in this attempted re-invention . Most recently, its share price plummeted 17% on May 23, a day after its profits fell by 33% for the first quarter of the financial year.