Now it’s Dell’s turn to follow the leader

The HP versus Dell battle has been an intriguing one in recent years, with the two giants exchanging the top spot in terms of global PC shipments. However it is HP leading at the moment, with Dell’s back well and truly against the wall.

This column has been criticised in the past for such a negative attitude towards Dell, but in a channel publication and with Dell’s often flippant attitude towards dealing with the channel press, it is not hard to justify.

Online in recent weeks we have seen further news breaking which only compounds Dell’s previously blinkered view of the industry. According to The Wall Street Journal it seems Dell may look to sell some of its manufacturing facilities around the world as a way to save some money. The company reportedly would like to sell the plants within 18 months and then contract with the buyers to produce Dell’s PCs. The reason? Saving money of course.

A Dell spokesman said the company would not comment on the possibility of selling its warehouses, adding only: “I can tell you we are designing a world-class supply chain that will position Dell for long-term success”. Pass me the sick bucket. Are we not all fed enough marketing rubbish on a daily basis? I would have preferred an always ironic “no comment” comment than that.

I remember not so many years ago, that Dell in the UK was regularly inviting journalists to tour its Irish manufacturing plants so we could see the well-oiled machine that is Dell in action. I didn’t make it along, but a former colleague did and was suitability impressed.

The sale of its factories would be a milestone change in Dell’s business model, after the vendor has built a legacy on its manufacturing skills for its build-to-order direct PC business. But even that model has changed over the last year as the company has sought to recruit thousands of solution provider partners to resell its products and services as well as sell its PCs through retailers in the US.

Dell owns US factories in Texas, Tennessee, North Carolina, Florida, with further factories in Ireland, India, China, Brazil, Malaysia and Poland. It’s unclear which warehouses the company may look to sell.

All of this coming hot on the heels of Dell producing yet another disappointing quarter with profits falling, but Michael Dell stating: “We are positioning Dell to win in a new era of global IT spending”. I think I might need that bucket again.

So if outsourcing is on the cards for Dell, it would be following their main rival HP, much like when Dell recently followed HP into the channel, too. The only problem with simply following your rivals’ moves is that you can’t actually get ahead of them using that method.

HP outsourced its manufacturing several years ago to concentrate on product design and marketing, while IBM also uses contractors to produce some of its technology. So Dell, the company which had such an industry-changing approach to the market, is now becoming like every other vendor out there.

If it doesn’t have an innovative route to market anymore, I guess Dell is going to rely on the strength of its products.

Oh dear.

dells follow its leader now strategy the to turn