Michael Dell talks Netbooks, services, green IT
The smallish devices known as Netbooks may be all the rage, but the CEO still needs some convincing.
Netbooks are unlikely to change the shape of the personal computer market, according to Michael Dell.
A number of hardware vendors, including Dell with its Inspiron Mini 9, have been unveiling their own versions of the ultraportable devices, but it seems the CEO himself is not convinced.
When asked about the Netbook phenomenon, Dell said: "I'm not that fond of the phraseology. If you look at screen sizes for portable computers, 85 percent of portable computers that run advanced operating systems are in the 14- to 15-inch screen space. What percentage will be 8.9- to 10-inch is hard to say."
He said it's unlikely that Netbooks will be a massive growth factor in the industry. "I think it's a second machine in developed countries and a first machine in newly developed countries," he said.
In a wide-ranging interview, the founder and CEO of Dell also discussed his company's upcoming push into services.
Dell is planning to launch an expanded managed services offering in London soon, with a suite of services including help desk support available to customers.
"The services business for us is roughly a $7 billion business. For every dollar spent on computers, companies then spend $2 to $3 on infrastructure services and support. When we sell 90,000 machines to a mining company in Australia the opportunity is to attack that $2 to $3 and take over the systems management of that," he said.
But this doesn't mean Dell is going to go down the same route as Hewlett-Packard, which bolstered its services operation by buying EDS recently. Dell said he preferred smaller acquisitions that aid the company by the "network effect" of sharing skills.
"I wouldn't hold your breath for a really big acquisition," he said. "We have some pretty good history with organic growth."
Dell dodged the question of whether the company will move into making phones, saying only: "I think you will see smaller- and smaller-screen devices from Dell," and noting that operating systems such as Windows Mobile and Google's Android have created the potential for disruption in the mobile space.
He also pointed to where much of the future growth in PC sales will come from: emerging markets. "The PC is an echo of the cell phone, about three years after. If you want to know where people are going to buy PCs, go where they were buying cell phones three years before for the first time," he said.
Dell added there has been a dramatic increase from customers in greener IT hardware: "The thing I've seen change dramatically in the last 12 months is, a year ago if you went to a CIO with a product that saved energy they would say that wasn't their budget so not their problem, but energy costs have gone up so much they are being held accountable for energy consumption."
Steve Ranger of Silicon.com reported from London.