Dell grew its server share in the first quarter of 2013, but that good news isn’t good enough, apparently. The company is now rallying around a new strategy to get its server and PC businesses booming again — by making fewer products, bringing efficiencies to its supply chain and lowering prices — according to a Monday article from AllThingsD.
Dell increased its server revenue and shipments in the first quarter, according to new Gartner and IDC figures, while archrival Hewlett-Packard’s server share declined. Gartner said Dell boosted server revenue by 14.4 percent year over year, and IDC put revenue growth at 10.1 percent. The problem is, lesser known server vendors edged out Dell in both categories.
After all, while its market share in shipments, at 22.2 percent, has gone up slightly since 2006, when it was at 21.7 percent, the other guys have jumped forward in a big way, from 27.6 percent to 37.5 percent. Going private, which is still in the works, could let Dell change up its operations without having to deal with shareholder scrutiny on profitability and other matters.
If Dell can execute on the plan quickly, it could gain advantage as other legacy vendors such as Fujitsu and IBM scramble to catch up and lower prices to stay competitive with Quanta, Wistron and other “no-name” vendors that have seen their market share rise. But those “other” vendors are shrewd and have sold boatloads of gear by building custom servers for a new wave of webscale customers. Quanta and their kind have figured out ways to keep costs low at scale — their shipments are more impressive than their revenue.
That’s why Dell might gain ground with this initiative against name-brand server makers, but it will have to try harder to fend off the little guys.