Memo to Michael: Dell's Report Card Since Your Return

| About: Dell Inc. (DELL)

Dear Michael,

Congratulations. Your recent acquisitions -- including Wednesday's buyout of Everdream -- were all solid moves.

You may recall that back in February, I wrote a memo highlighting 10 Ways to Fix Dell (NASDAQ:DELL). Let's review each point of that memo to measure your progress so far.

My 10 key recommendations in February included:

10. Visit CIOs and Apologize: I hear you've been on the road, listening to chief information officer feedback about Dell's hits -- and many misses -- over the past few years. That should buy you some goodwill as CIOs prepare their budgets for 2008. But you still need to improve enterprise support. Grade: B-

9. Focus: In February, your Website promoted "more than 20,000 different products." Today, your homepage is organized into clear product categories. That's a start, but it doesn't address item 8 on my list. Grade: B

8. Exit the TV Business: Prices for LCDs and plasmas continue to plummit but you remain in this business. I guess you want to be in consumers' living rooms. A far wiser move would be to emphasize digital signage -- you know, the LCD screens and related software displaying ads in retail stores, airports, etc. Grade: Incomplete

7. Get Serious About Open Source: You're really executing on this one. Dell's decision to load Ubuntu Linux on consumer PCs, and your Nov. 14 partnership with Sun prove your commitment to open source. Now, find a way to support all of the open source application providers doing business in Red Hat's online store. That's where the hot action is in the server market. Grade: B+

6. Get Serious About Networking: Actually, I take this piece of advice back. Don't push deeper into networking on your own. Cisco's (NASDAQ:CSCO) too strong. Simply resell more and more networking gear from other companies. Grade: Incomplete

5. Recruit More IT Consulting Partners: You've done this, indirectly, by acquiring Everdream, EqualLogic and Silverback. Now, do something dramatic. Hold a virtual conference online, inviting Everdream, EqualLogic and Silverback consultants to hear your partner strategy. Heck, I'd be happy to host it for you. Let attendees quiz you and Dell's executive team directly, without the press (or annoying bloggers like me) in the way. Then, hold a face-to-face channel summit in 2008. Celebrate your partners, listen to their fears, and address them head-on. Otherwise, many consultants will continue to distrust Dell. Grade: C

4. Call SAP (NYSE:SAP): I'm not sure how much progress you've made with big enterprise software companies that are pushing into smaller customer settings. Frankly, I'm willing to give you a pass on this one, since you've made so much progress with open source partners. Grade: Incomplete

3. Go Back to Your Dorm Room: I suggested you visit college campuses to get a feel for student's computing needs. You delivered colored notebooks. Yawn. Steve Jobs did back in the 1990s, didn't he? Apple and Google continue to innovate. I can't say the same for Dell yet. Grade: D

2. Cut Staff Fast: My point here was to make sure Dell gave employees clarity on their future very quickly. In May, you announced plans to cut 8,000 jobs but said the cuts would occur over the next year. Grade: Incomplete

1. Pay Shareholders A Dividend: I'm still waiting for mine. But I'm willing to delay the dividend if you plow revenue back into R&D, customer support and product quality. Grade: Incomplete

Bottom line: It's only been 10 months since you returned as Dell's CEO. You've made a lot of progress. But all of those incompletes show just how much work awaited you.

Disclosure: Author has a long position in DELL

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Tagged: , Personal Computers
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