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Hewlett-Packard's decision to spin-off its hardware business creates a lot of uncertainties for its customers and for the PC market itself. Naturally, leading makers of personal computers are now weighing chances and prospects that HP's potential exit from the PC market brings. Michael Dell, the head of Dell, believes that HP's plan to spin-off or sell its personal systems group (PSG) brings great opportunities for his company.

"We are committed to the PC business. We are committed to a broad range of solutions. I started the company in 1984 in my dorm room as a PC business, but in 1995 we got into the server business and now we have a broad range of solutions and services. [...] [HP's withdrawal from the PC business] is a great opportunity for our channel partners first and foremost. It gives us a significant advantage. I am not going to give you a number. Call some of the financial analysts," said Michael Dell, chief executive officer and chairman of Dell, in an interview with CRN web-site.

Dell does not believe that the era of the personal computers is nearing its demise. Although the market of ultra-portables will expand tremendously, the PC will remain.

"I think that client business is as important as ever. We like that business. And we love our partners. We have been very consistent. [...] I have heard this term 'post-PC era'. [...] Actually you can find a press release from IBM where they are talking about the post PC era in 1999. [...] Around that time, the industry sold about 100 million personal computers a year. So that was the beginning of the post-PC era. Well, now it's 2011 and there is about 440 million PCs sold per year. So that means that the post-PC era has been better for the PC than whatever came before the post-PC era. [...] How many tablets are going to be sold this year? You hear 40 million, 50 million. [...] It's nowhere near the 440 million PCs that will be sold this year or the [1.5 billion] installed base," said Mr. Dell.

It is noteworthy that Dell believes HP will lose server and enterprise market share after spinning off or selling PC business, which means even greater opportunities for Dell and others. Dell believes that thanks to volumes of PC products that it makes it will be able to get discounts on components that are used both inside servers and clients.

"If one remembers back to the last time a large PC company was spun off or sold, there was a lot of share loss in servers for IBM. We have far greater share than IBM does in x86 servers now. Globally they are 14-15%. We are about 26-27%. Their [IBM server] share has gone down, down, down since they spun off the PC business. There are very important reasons for that: one is the integrated nature of client and server sales in many accounts. There are also important economic reasons for it. If you open up a server and look at what's inside a server, it's processor, disk drives and memory. Those are the three primary cost ingredients that go into a server. [...] The summary is that Dell is now the x86 enterprise partner of choice. If I am in the channel I want to be working with the enterprise x86 partner of choice," concluded Mr. Dell.

Tags: Dell, HP, Business


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