Dell Looks to Cut $2 Billion in Costs Over Next Three Years | News | ChannelWorld.in

PARTNER HOTLINES

Dell Looks to Cut $2 Billion in Costs Over Next Three Years

Added on Jun 14, 2012 by Agam Shah, IDG News Service

Dell on Wednesday said it wants to cut US$2 billion in costs over the next three years as the company moves a larger part of the business toward the enterprise to increase profitability.

The cost cuts will come in a number of areas including standardizing PC and server system configurations, moving operations to more affordable geographic areas and making the supply chain more efficient, said the company's CEO, Michael Dell, during a keynote at the company's analyst day, which was webcast.

The company will reinvest some of the savings attained through cost cuts into growth areas such as the enterprise business to increase profitability, Dell said. The company has already been pouring financial and research resources into the enterprise business, which includes software servers, storage, services and networking.

The company in the last 12 months also acquired eight companies, many of which are software and security companies tied to the company's enterprise products. The company's big acquisitions this year have included security company SonicWall and thin-client hardware, software company Wyse Technology and a string of companies that migrate workloads from mainframes to industry standard servers.

While the focus is on the enterprise and data centers, the company is not abandoning the PC business, Dell said. The company is trying to keep the focus on higher-margin products like XPS PCs, which are selling well, he said. The company will try to keep the PC business lean and jump only into areas where there are growth opportunities, Dell said.

The company is seeking a $1 billion cost reduction in the PC business by 2016, said Jeff Clarke, vice chairman and president for global operations and end-user computing solutions at Dell. The total PC market is a $235 billion opportunity in which 64 percent of the PCs are priced above $500, which is healthy for Dell.

Today, more than 50 percent of the units shipping today from Dell are predetermined configurations, and 70 percent of the PCs assembled are by third-party companies, Clarke said. The company still sees an opportunity to cut costs by standardizing configurations and using freight for product delivery.

"We're not done reducing the complexity of products," Clarke said. "We still touch too many orders at Dell."

Dell has already driven a lot of complexity out its PC business to control costs over the last two-and-a-half years, Clarke said. The company has reduced 30 percent of PC platforms as part of standardization efforts, which have helped simplify the supply chain and reduce component costs.

Dell also sees an opportunity in Windows 8, which should boost tablet and PC shipments, Clarke said. Dell plans to release Windows 8 tablets for enterprises under the Latitude and OptiPlex brands.

EDITOR'S PICK

Try These 5 Undiscovered Google Drive Tricks

Google Drive and its attendant apps offer a wealth of tools to help you be more productive. Try these five for the biggest boost.

What Does the Collaborative Economy Mean for Information Security?

Most employers allow their staff reasonable use of office products such as telephones, copy machines, coffee and the like. For the most part, employees won't be using the copy machines to compete with Kinko's or a company car to compete with black car limousine services. Well, at least not until now.

Tech Chat

Collaborating To Outcome Based World: Priyadarshi Mohapatra, Avaya

Priyadarshi Mohapatra, Managing Director, India and SAARC, Avaya, on how IT is transitioning from a keep-the-lights-on role to one that enables customers to deliver results.

The Dawn of the Digital Age: Akhilesh Tuteja, KPMG

The development of digital infrastructure will be a key growth driver for technology and solution providers. 

Paradigm Shift from End-Users to User-First : Parag Arora,Citrix

Parag Arora, Area Vice President and India Head, India Sub-continent, Citrix, says new technologies will force organizations to take a user-first approach in 2015.

Mobile and Cloud Are Gamechangers of the Future: Karan Bajwa, Microsoft

Karan Bajwa, Managing Director, Microsoft India, says, in  2015, organizations will adopt a mobile-first and cloud-first strategy to get ahead of competition.

A Network for the Internet of Everything : Dinesh Malkani,Cisco

Dinesh Malkani, President, India and SAARC, Cisco, talks about IoT and the significant technology transitions in the networking world.

Moving to the Third Platform: Jaideep Mehta, IDC

Cloud and mobility are the two technologies that will fuel the rapid adoption of the third platform in India.

Envisaging a Holistic Security Strategy For 2015: Sanjay Rohatgi,Symantec

Sanjay Rohatgi, President–Sales, Symantec India, says the company has a set of holistic solutions in place to secure organizations from security threats. 

Beating the Bad Guys: Sivarama Krishnan, PwC

Organizations will need to turn inwards to establish robust information security strategies.

Building Capabilities for a Digital Tomorrow: Alok Ohrie,Dell

Alok Ohrie, President and Managing Director, Dell India, on the company’s investments to build end-to-end solutions and delivery capabilities for a digital world.

SLIDESHOWS

CEO Comebacks: For Better or for Worse?

We bring to you six global CEOs who made the idea work, or not.

Datacenters in the Weirdest Places

A peek into some of the most unusual datacenter locations in the world. Here are 13 datacenters that are built in unusual locations like mines, ships, trucks and even a nuclear collidor. Taking about common wisdom, eh?

12 LinkedIn Mistakes IT Pros Make

LinkedIn is the go-to place for IT pros to market themselves, connect with co-workers, find former colleagues, and meet-up with like-minded folks. Take a few minutes now to make sure your profile showcases your accomplishments, and skills. Here are some common mistakes to avoid.

ChannelWorld Survey: State of the Market 2014

Partners poll their sentiments, expectations, pain points, and challenges for the coming year.

6 Leaders Who Headed for an Abrupt Exit

The abrupt exit of top leaders of Indian and global tech companies this year, with many of them citing ambiguous reasons, surprised the technology world.

FAST TRACK

Kamtron Systems

Transitioning towards a service-oriented company will boost our growth, believes Kavita Singhal, director, Kamtron Systems.

TIM Infratech

Delivering ‘best of breed’ technologies to enterprises is key to success, says Monish Chhabria, MD, TIM Infratech

Mudra Electronics

A vendor-agnostic strategy helped us sustain business, says Bharat Shetty, CMD, Mudra Electronics.

Systematix Technologies

Our USP is a customer-friendly approach backed by services, says Akhilesh Khandelwal, Director, Systematix Technologies.

CorporateServe Solutions

Our ability to turnaround complex ERP projects in record time is what gets us customer referral, says Vinay Vohra, Founder & CEO, CorporateServe Solutions.

KernelSphere Technologies

We are emerging as an end-to-end systems integrator, says Vinod Kumar, MD, KernelSphere Technologies.

Uniware Systems

We constantly validate emerging technologies for first-mover advantage, says Vergis K.R., CEO, Uniware Systems.

Astek Networking & Solutions

An innovative approach helps us stay successful, says Ashish Agarwal, CEO, Astek Networking & Solutions.

CSM Technologies

Our approach is backed by innovation and simplicity, says Priyadarshi Nanu Pany, CEO, CSM Technologies.

EMC PARTNER SHOWCASE

Partnering for Profitability

Atul H. Gosar, Director, Network Techlab, shares how the company’s association with EMC has provided it with a competitive edge and a wide customer base, leading to increased profitability.

Sponsored Content

Promising Pipeline

Venkat Murthy, Prime Mover, 22by7 Solutions, shares how EMC brings in competitive edge by enabling technology, GTM and lead generation, helping 22by7 acquire new customers and retain old ones.

Sponsored Content

Powerful Performance

Deepak Jadhav, Director, VDA Infosolutions, says initiatives by EMC around training and certification have helped the company’s staff improve its performance and enhance customer experience.

Sponsored Content

Performance Booster

Rajiv Kumar, CEO, Proactive Data Systems, says that the solution provider’s association with EMC has helped expand its customer base and added value to existing offerings.

Sponsored Content

Pursuit of Profitability

Santosh Agrawal, CEO, Esconet Technologies, shares insights on how the systems integrator’s association with EMC has spelled sustained success over the years.

Sponsored Content

Non-Performance is Not an Option

Nitin Aggarwal, Director, Trifin Technologies, shares insights on how the association with EMC has helped the system integrator stand out and empowered its personnel to deliver consistent performance.

Sponsored Content

SOCIAL MEDIA @ CW India
SIGNUP FOR OUR NEWSLETTER

Signup for our newsletter and get regular updates.