Analyst Sees Dell's Future in Enterprise

Dell always had trouble competing with IBM and HP on a level playing field for big enterprise contracts.

However, a changing PC landscape may force the company deeper into servers, storage and services, an analyst claims, and turn the company into a serious contender.

Dell appears to be gaining credibility with analysts and its ability to reposition itself for more enterprise market share. Dell's problems historically lie in the fact that it was focused very much on client business for a long time, and fought the battles with HP and IBM which threw in their PCs as an incentive to score a larger server or services contract. This scenario seems to be following them to today as UBS analyst Steve Milunovich pointed to the fact that many enterprise customers simply do not know that Dell has moved upmarket.

The company is facing a substantial marketing challenge at this time, but Milunovich currently put Dell's stock at a cautiously optimistic neutral rating, despite the fact that Dell is expected to cut its revenue expectations due to a slowing PC business.

Interestingly, Milunovich graded HP's stock as a sell rating and indicated that it may be better for HP to spin off printers and PCs from its enterpise business. HP is currently viewed as neither black nor white as Milunovich said that "HP lacks the pure enterprise focus of IBM and EMC yet will have trouble competing for consumers without strong tablet and phone businesses like Apple and Samsung."

The analyst said that he expects HP's stock to underperform until investors see growth opportunity.

Recent Dell related stories covered by Tom's IT Pro:

Dell Adds Cloud Enabler to Certification Program

Emulex Offers 16 Gb Fibre Channel Cards For Dell Servers

Dell Begins Reselling Microsoft Office 365 to SMBs

Dell Moves Deeper Into Big Data With RainStor

Dell Acquires Quest Software for $2.36 Billion

Dell Announces Virtualized GPU Support In 2U Rack Workstation

Dell Rolls Out ARM-Based Copper Servers to Select Customers

Dell Presents 22nm Xeon-Powered PowerEdge Microservers

Wolfgang Gruener is a contributor to Tom's IT Pro. He is currently principal analyst at Ndicio Research, a market analysis firm that focuses on cloud computing and disruptive technologies, and maintains the conceivablytech.com blog. An 18-year veteran in IT journalism and market research, he previously published TG Daily and was managing editor of Tom's Hardware news, which he grew from a link collection in the early 2000s into one of the most comprehensive and trusted technology news sources.

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