Dell wants its name to ring from the desktop to the data center. The world's #3 supplier of PCs (behind #1 HP and China-based #2 Lenovo), the company offers a broad range of technology products for the consumer, education, enterprise, and government sectors. In addition to a full line of desktop and notebook PCs, Dell offers network servers, data storage systems, printers, Ethernet switches, and peripherals, such as displays and projectors. It also markets third-party software and hardware. The company's growing services unit provides asset recovery, financing, infrastructure consulting, support, systems integration, and training. Dell generates nearly half of its revenues outside the US.
After weathering a 13% decline in revenues in fiscal 2010, Dell saw its revenues bounce back by 16% in fiscal 2011, with the biggest gains reported in its services unit (25% increase). Net income also spiked 84% that year. The healthier numbers resulted from an uptick in commercial IT spending worldwide and the integration of Perot Systems, which Dell acquired in 2009. The Perot Systems acquisition broadened Dell's range of IT services, especially in the US; the addition of Perot's clients also beefed up Dell's customer base.
Dell has traditionally been a desktop PC company, and desktop PCs continue to generate about a quarter of the company's total revenues. This business faces a shrinking PC market, however, and increasing competition from the likes of Lenovo and Acer. Leading seller HP went so far in 2011 as to threaten to exit the PC business, while China's Lenovo soared, snatching the world's #2 spot from Dell that year.
As demand for desktop computing wanes, Dell's mobility segment, which makes notebooks and smartphones, is generating a larger share of revenues, accounting for nearly one-third of the company's sales. This segment also generates significant sales from high-end gaming and multimedia PC products, including its XPS and Alienware lines. Other key product offerings come from Dell's software and peripherals segment, which consists of Dell-branded displays and printers, as well as third-party peripherals, software, digital cameras, printers, and televisions.
Like many of its competitors protecting themselves against a weakening PC market, Dell offers enterprise products, including servers and networking equipment, as well as storage devices. As with its PCs, Dell's servers are primarily Wintel devices, but it supports versions of Linux from both Red Hat and Novell on select servers, as well as the Solaris operating system. Dell's storage line includes the PowerVault systems and devices from EMC. On the enterprise services side, Dell offers a broad range of configurable IT and business services, including infrastructure technology, consulting and applications, and product-related support services. This services segment accounts for more than one-third of Dell's total revenues.
The variety of the company's product and service offerings is indicative of its ongoing effort to keep pace with never-ending advances in computer technology. Dell already proved its ability to adapt to changes in the marketplace after it expanded beyond its direct sales model to partner with retailers (including Best Buy and Wal-Mart), resellers, and distributors to reach new customer segments. In recent years, it has been enhancing its product and service offerings by leveraging cloud computing and other new technologies.
The company has made a number of large acquisitions to improve its cloud computing technologies and bolster its data storage capabilities. (Cloud computing, by nature, requires vast amounts of data storage.) Key transactions include its purchase of data storage company Compellent Technologies and Ocarina Networks, a privately-held data storage company with technology that compresses images and other data to free up storage space. Combined with its other storage capabilities, the Compellent and Ocarina technologies allow Dell to strenghen its cloud computing networks. In 2012 it bolstered its storage and data center product portfolio further with the purchase of AppAssure, a provider of application, data, and server protection.
Also that year Dell tightened up its IT security business when it agreed to buy network security and data protection company SonicWALL. The acquisition will bring in patents and technologies on functions such as firewalls, secure remote access, email security, and backup and recovery. In 2011 Dell bought Internet security software developer Force10 Networks, which specializes in applications for data centers. Its 2010 acquisition of Boomi added hosted cloud integration technology to Dell's cloud computing expansion efforts. (Such cloud integration technology allows for easy data transfer between cloud-based and on-premise applications with no software or coding required.)
While many of its recent acquisitions have focused on building out its cloud computing services and related technologies, Dell has also continued to expand other service-based technologies. In 2011 it boosted its software-as-a-service (SaaS) offerings after buying SecureWorks, a provider of remote security monitoring and management services. The acquisition gave Dell its first managed security service offering under its own brand. The purchase also expanded the company's hardware-based offerings to include hosted services. Dell expects that the remote services option will help drive sales of its hardware.
Acquisitions have expanded other non-core businesses as well. The company's direct finance business received a boost in 2011 after it acquired Dell Financial Services Canada, a partnership between CIT Vendor Finance and Dell. In a related move to expand direct financing operations outside of the US, Dell is purchasing Dell-related sales and servicing operations in Europe from financing partner CIT Vendor Finance.
Because Dell does a significant portion of its business in international markets, the company is looking to bolster its presence in developing markets, such as Brazil, China, India, and Russia to complement its baseline sales in the US. The company also continues to look overseas to find operational cost-saving opportunities. Based in Singapore, Dell's Asia/Pacific segment includes manufacturing and distribution units in China, India, and Malaysia. Additionally, the company made a major investment in a business center in India.
Founder Michael Dell and his wife, Susan, own about 13% of the company.