Dell’s Roadmap for Recovery 2016: The War Room Strategy

By jmacofearth On 07/31/2015 · 1 Comment

Dell is resilient. Dell is no longer beholden to a board of directors for quarterly performance reviews, strategy adjustments, and massive annual retooling exercises. Today, Dell is again, it’s own company. And while the entire PC industry is suffering from the glut of cheap PCs and the Windows 8 debacle, Dell grows a bit of market share during the slump. This bodes well for Q3 adn Q4 as we head into the back-to-school and holiday markets, Windows 10 has shipped and so far the warts are all manageable. So Dell seems poised to have a good finish to their year.

But this logic is dampened slightly by this fact: Dell generates 80% of its revenue from large business clients, NOT consumer. So while Windows 10 may be a nice inspiration for mom and dads getting their kids ready for the next semester, the business world is just now considering the new Windows 10 systems for NEXT YEAR. If Dell’s hardware continues to be lackluster and plasticky, Dell’s large business customers are likely to stick with HP or jump to Lenovo, who have capitalized on their acquisition of the ThinkPad line. When considering a computer for your business there are three things to consider.

Price.
Support and Service.
Product

Dell no longer commands the lowest price. They have suffered stories and social media firestorms about their support and service practices, and I’d venture to say, they are struggling in the product category as well.

This week I started a new project with a company that provided me with a very nice HP Folio laptop. It looks and feels just like my personal MacBook Pro. Nice i5 Intel processor, a good bit of ram and an SSD drive to accelerate the startup and entire system. Nice.

I cannot point to a single Dell laptop that I’d prefer. And that’s a problem. There are several Lenovo laptops that would’ve stood up to this quick and slim HP, but Dell was not even in my consideration. (Of course, the choice was not mine.) But Dell wouldn’t have been on my top 3 consideration list. And that’s a problem.

Today when you think of Dell, what are the words that come to mind? What does the Dell brand inspire in the current consumer’s mind?

Here’s what Laptopmag.com says about Dell’s brand in 2015.

For value, Dell usually offers equal or lower prices than its cheapest competitor, with systems such as new XPS 13 leading the way. It features a gorgeous full HD, 13.3-inch Infinity display, 5th-Gen Intel Core i3 CPU, 4GB of RAM and a 128GB SSD for just $799. Dell’s Alienware gaming notebooks offer stylish looks and great performance without the markup of many other boutique notebook makers.

In the $399 to $799 market place, Dell still holds court. And according to Laptopmag, they’re #2 on the preferred brand list.

But they come in last place in service and support:

Dell kept us on the phone longer than any other company during our undercover Tech Support Showdown, with an average of 27 minutes and 20 seconds.

So what’s happening? What is Dell to do in this rough market?

I also want to make note of the rampant increase in calls from recruiters looking to fill newly approved positions at Dell Corp in Round Rock. This signals two things. 1. They probably laid a bunch of people off recently as they were still trying to report good numbers to media. 2. They are behind the curve in gearing up for back-to-school and holiday 2015. (This is usually the case every year.) And while I considered a position back at Dell for about a week, it was mainly about the money. Dell pays well. But they tend to chew people up and spit them out in a shorter period of time than most companies.

Dell’s biggest problem in the market place is perception. Dell is no longer sure of what kind of computer company they want to be. Yes, they’ve doubled down on services and solutions, trying to gain revenue beyond the selling of computer boxes. But they have too many Dell brands and too many product lines for any IT Purchasing manager to make sense of. Again, I’m back to talking enterprise, or big business here.

Dell lives and breathes by the purchases of major Fortune 500 companies.

When they begin buying Lenovo or HP, Dell loses, big time. And today, I’d defy you to jump to Dell.com and tell me the best laptop for my 30-person team. Now do the same exercise on HP and Lenovo. Finally, though this is not a fair fight, do the same thing on Apple.com.

What you will see:

Dell has too many products, too many sizes, too many sales channels (am I a small business, a home business, or a big business), too many decision points for anyone to make an educated decision.
Lenovo is kicking ass in the market because of the ThinkPad brand and how they simplify the decision about which laptop to buy.
HP is cleaner than Dell with regards to branding, but they still have too many choices.
Apple has essentially 2 computer lines. 1. MacBook Pro (fast, expensive, built to last); 2. MacBook AIR (light, expensive, built to last). Within those lines there are two screen sizes to choose from. And while you can modify the ram and processors inside, with what you know about Apple, you are guaranteed to be getting a best-that-money-can-buy solution. The sacrifices are never in quality components, but in how many and how fast you want them.

Dell, by design, is always trying to use the cheapest parts and systems. Unfortunately that’s how Dell’s brand is pegged. Unless you pay for the expensive Dell (Latitude), you are getting a piece of plastic, that might last a year in your kid’s hands, but will probably be disposable in no more than two years.

Dell won our hearts and minds by establishing their brand as the LOW COST LEADER. Dell is the Walmart of computers. Unfortunately in the big business marketing of computers, the cheaper parts and cheaper manufacturing specs leads to higher support and service calls.

Dell is no longer the cheapest.

Dell is no longer the sexiest.

Dell has to earn your business again. They can’t do it on price. Here’s where Dell needs to focus to challenge HP and Lenovo in the upcoming PC wars:

Support – must be world-class. Dell needs to study San Antonio’s Rackspace to learn what "fanatical support" means.
Product – Dell has to simplify their brands. Establish Latitude as the MacBook Pro killer. Establish Inspiron as the AIR and low-cost product line.

*FINAL* DELL ROAD MAP FOR 2016 RECOVERY

KILL ALL OTHER DELL BRANDS. Go to war with LATITUDE and INSPIRON. Period.

I’m sorry to tell you, Michael Dell, the value of Dell needs some help. The value of "Vostro" or "XPS" are zilch. Sure, you can keep Alienware, because the margins are awesome and gamers will continue to pay for buzzers and bells. But drop all the extra brands. And put DELL back on the bezel. It’s DELL we want, not Inspiron by dell.

I guess this is nothing new. I’ve been saying it for years:

@jmacofearth (also seen on Google+: jmacofearth)

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