Dell's "New" CEO: The Beginning of a Renaissance?

Back in May, I posted on Dell's (DELL) troubles. At the time, I didn't really think too much of the shares and didn't own any. Over the summer, though, the shares just got too cheap given the amount of cash that the company produces, and so I picked up some shares (which I continue to hold).

Recently, as most probably know by now, CEO Kevin Rollins stepped down and Michael Dell took back over at the helm. I'll be honest, I'm excited about Dell running Dell again, but it's not like he really ever left. He's been the Chairman all along (as I mentioned in the last article) and he practically shared an office with Rollins - they were just separated by a door (glass door, I think). He could bring a little more pizazz and rah-rah spirit back to the company, but there are a lot of tough decisions ahead if they really want to get back to a growth stride even close to the past.

The one thing in most of the media coverage that I take issue with is that everyone is pointing out the fact that Dell recently lost the spot as the #1 PC seller to HP (HPQ). You know what? Fuggedaboutit. I mean it. Sure, Dell made its name selling PCs and still does it pretty darn well (ok, maybe the customer support could use a little help!), but selling PCs is a race to the bottom these days. I'd much rather see Dell secure itself a position in a more profitable area than waste a lot of time and resources slugging it out in a PC market that sports razor thin margins. It sounds like services are going to be a focus for the company going forward, and that should prove to be a more profitable area - if they can pull it off.

Ever heard of IBM (IBM)? Sure, they saw the writing on the wall sooner, but I figure it's better late than never for Dell. I wouldn't say they have to get out of the PC business altogether as IBM did, but I'm just saying that losing the #1 spot in that market shouldn't mean that we should all be carving a Dell headstone reading "once was the #1 PC seller."

Dell's fantastic execution in the supply chain and its penetration in the business market worldwide are two great assets when looking to a Dell renaissance. Now I just hope that renaissance comes.

Comments

[Tommo_UK]

DELLuded.