Dell: PCs, Servers, Storage to Remain Growth Areas

Dell Computer Corp. is betting on the servers and storage market as a high-growth area for the near future, said Chairman and Chief Executive Officer Michael Dell in his keynote address at the Comdex trade show here Monday. The growth of high-speed Internet connections as well as the explosion of new devices for Internet access all portend a need for more server capacity, he said. [Note to editors: This is a second update of an earlier story. New material appears in bold.]Dell predicted continued rapid growth in his company's server sales. Dell is Number 2 in the worldwide server market, he said, and one in four servers sold in the U.S. is a Dell. "We believe the same thing that happened in PCs and notebooks will happen in the server market."

In his keynote speech, Dell made sure that no one could miss the message that wireless is the future. He introduced several video segments featuring his mother interviewing people in the street about what products they want for their computing needs, as well as dancing in a gym studio while singing, "Wireless! Wireless!"

"All our laptops have wireless capabilities embedded," said Dell. "That doesn't mean that they can't run on wired networks, I know that a lot of our customers don't have access to a wireless network," he said.

His company is committed to "industry standards" such as Windows 2000 and Linux, he said. He credited non-proprietary architecture, with its high rate of innovation and low cost, with helping break open the server market, once dominated by proprietary vendors such as Sun Microsystems Inc., Silicon Graphics Inc., and Hewlett-Packard Co.

Dell said his company's "scale-to-size" servers are proving popular with customers, listing several companies, such as USAToday.com, Exxon-Mobil Corp., Nasdaq Stock Market Inc., and the U.S. Navy, which have chosen his company's servers products.

Dell predicted a growing shift from fixed to mobile computing, but said technology such as automotive and handheld devices and Web-enabled phones are a complement and not a replacement for the PC. He said Dell's customers are telling the company they prefer the idea of mobile Internet access via wireless notebook computers, using technology such as the Bluetooth and 802.11 standards as well as emerging wireless telecommunications technology such as GPRS (General Packet Radio Service), wideband CDMA (Code Division Multiple Access) and UMTS (Universal Mobile Telecommunications System). He said new Dell products, such as a C600 wireless notebook, are poised to take advantage of that trend.

"We have a booth here at Comdex where we are showing handhelds, MP3 devices, and we are selling those," he said. "But I don't want you to walk away from here under the impression that those products come anywhere near the importance of the servers and the storage products." He did, however, confirm that Dell is currently investigating going into the handheld market.

"It's customers that made Dell great in the first place, and if we're smart enough and quick enough to listen to customer needs, we'll succeed," said Dell.

Dell said his company avoids "obsolescence" by responding to customer requests via the Dell.com Web site, which generates some US$50 million a day in revenue. Taken alone, Dell.com would rank 90 on the Fortune 500 list of top companies, he said.

Dell outlined plans for further growth of the Internet platform. Over half of the company's customers use Web-based customer support -- a proportion which the company hopes to increase to over 80 percent by the end of next year, he said. Dell is increasingly using an online "resolution assistant" to diagnose problems remotely, he said, adding, "We believe we can detect and solve issues in a self-healing mode" over the Net.

When asked about the current chaotic situation with the U.S. elections, Dell was noncommittal. He did, however, say that as far as Dell is concerned, it will not make any difference who becomes the next president. Dell said he believes that any government will be technology-friendly, especially when it comes to education.

Dell also said that his company has a tradition of in-house production, and is not looking to use outsourcing services.

When asked if Dell is ready to move into the biometrics market, Dell said the company is already there.

"We have a whole security group at Dell," he said. "Some customers want digital keys, others want digital signatures, eyeballs, some are happy with passwords, others prefer hard drives that can be removed and locked up, others prefer encryption methods. There are eight different security offerings to choose from." He said the company is looking to form partnerships in the biometrics area.

W. Michael Dewel, president of Houston-based Chipsmart, is one corporate buyer who thought Dell's keynote here today was excellent.

"Dell has a great concept with all its scalability," said Dewel.

"He (Michael Dell) did an excellent job." Dewel has not, however, chosen Dell for his own company. "We have HP (Hewlett-Packard) machines," said Dewel.

Dell, in Round Rock, Texas, can be reached at +1-512-338-4400 or http://www.dell.com/.

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