Dell touts services tack after Acer PC triumph

IDG News Service - Dell's growth plans focus on pairing its hardware and IT services offerings rather than on increasing PC unit shipments, a company executive said Wednesday, dismissing rival Acer's rise past Dell in PC sales.

Dell will keep building its focus on IT services, most recently boosted by its decision to spend US$3.9 billion acquiring services provider Perot Systems, Steve Schuckenbrock, head of Dell's enterprise business unit, told reporters at a briefing.

"Chasing units, just pure PC units is not our priority," Schuckenbrock said. "If Dell shipped 100 percent of all the units in the industry at Acer's profit margins, it would not add up to the profit of Dell."

Taiwan-based Acer surpassed Dell to become the world's second-largest PC vendor in the third quarter, when Acer's 11 million shipped PC units outstripped Dell's by about 1 million, according to IDC.

Dell is also always interested in expanding its virtualization software offerings, said Schuckenbrock.

The Perot deal could help Dell win IT infrastructure deals in China funded by a government fiscal stimulus package, said Paul Bell, head of Dell's public sector unit, at the briefing. Much of China's $587 billion package is headed for the health-care sector and for new hospitals, and Perot has ties with health and other government officials in China, said Bell.

China has been a bright spot for IT spending by companies in the economic downturn, said Schuckenbrock. Asia overall has also performed well compared to a challenged European market and the U.S., though Dell has seen signs of an economic pick-up in the country, he said.

The PC market in the Asia Pacific region excluding Japan beat forecasts for the third quarter. The region's market grew by 17 percent compared to a year earlier, higher than a forecast of 9 percent, IDC said this week. The growth benefited from a strong market in China and spending in the country's public sector, IDC said.

The launch of Windows 7 this week could further boost IT spending at companies, partly because "Vista was a bust" and many companies are running aging machines with Windows XP, said Schuckenbrock. Hardware spending could pick up around the middle of next year as companies increasingly look to upgrade, he said.

"We're bullish on it," Schuckenbrock said of the OS.