Dell confident in the wake of HP acquisition announcement

Dell's EMEA director of marketing, James Quarles, has replied to market speculation on how HP's acquisition of EDS could affect the company.

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By  Brid-Aine Conway Published  May 18, 2008

Dell's EMEA director of marketing, James Quarles, has replied to market speculation on how HP's acquisition of EDS could affect the company.

HP's recent announcement of the acquisition of the long-time Dell alliance partner caused equal speculation that Dell had missed a trick by not pursuing EDS, and that HP had bitten off more than it can chew, but Quarles is confident Dell is playing the right strategy.

"I think strategic acquisitions are the most visible manifestation of a company's strategy. So it's very telling to analyse and observe an acquisition of that size in relationship to our own strategy," says Quarles.

Dell's own acquisition strategy has taken in smaller companies such as EqualLogic, Silverback and, most recently MessageOne. HP's previous acquisitions have included larger companies like Compaq, whose slow integration gave Dell an edge in the market according to some market observers.

"You never wish a competitor poorly, but we certainly think that large acquisitions can be hard to digest," says Quarles, "HP has the experience with Compaq but EDS is a very large acquisition. Our largest acquisition was EqualLogic and it was a tenth, a 13th of the size of what they're pursuing."

This could be the latest in a line of tests that have seen Dell's profits slide over the last few years.

"If you rewind 18 months and you were reading the general press, there were a number of challenges that the company faced," Quarles says.

"Certainly the battery challenges that we had, and from a leadership standpoint we made some changes. From the marketplace, if you looked at the results, we were number one worldwide in PCs and we were overtaken, and I think there were some highly visible and amplified stories about concerns of support," he continues.

Quarles feels the recent "slowdown" the company has experienced came as a result of answering these challenges.

"We recognise a slowdown in the business because we had grown and our competitors had effectively closed the gap on what our primary differentiation point had become, which was the direct model and the cost advantage of that model. We made a number of changes and transformation takes time, a lot of energy and quite a bit of leadership," he says.

Quarles was speaking at Dell's 149-city Future of Computing Tour for customers, which visited Dubai this week with its "Simplify IT" message.

Historically, Dell has underperformed in the Middle East market in comparison to its global market, which the company is aiming to change. A number of new investments in the region were announced, including a hub and distribution centre, which opens in Jebel Ali in June and a retail store planned for Festival City.

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