OpenWorld: Dell advises HP to stay in the PC business

SAN FRANCISCO: Michael Dell has been touting the benefits of being in the PC business, in a thinly veiled swipe at rival HP's previous announcement that it will spin off its PC division.

Speaking at the Oracle OpenWorld show on Tuesday, Dell told the crowd that the PC business is still worth billions of units, and that Dell is very happy to be a part of this market.

"Dell does shiny boxes, and we do them very well," he said. Although he also reiterated that "Dell is not a PC company", but an end-to-end solutions provider.

Dell also gave a warning to HP that leaving the PC business would harm its operations in other areas.

The chief executive noted that 95 per cent of disk drives go into PCs, leaving only five per cent for storage and servers. Hence if HP exited the PC business, it would be a much smaller player in terms of purchasing components, losing its buying power along the way. In turn, this would lead to higher product costs for customers.

However, Dell's warnings might be unnecessary. The PC spinoff plans were announced by Léo Apotheker, who has since been sacked and replaced by former eBay chief executive Meg Whitman.

Whitman said today that she will make a decision on the HP PC business by the end of October, and there is nothing to indicate that she is as keen as Apotheker to exit the market.

Also at OpenWorld, Dell said that a move to standardise on applications and use business analytics from Oracle had helped the firm transform its IT focus.

He explained that, before the project, 70 per cent of the IT budget had been spent on keeping the lights on, leaving only 30 per cent for strategic, transformational spend. The apps overhaul had shift this ratio to a 48/52 per cent split in favour of innovation.