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Dell's Manifest Destiny

Kevin Rollins has a vision. "We're very encouraged about the potential for Dell to grow into a broadly based and broadly acknowledged IT company," Rollins says about the computer vendor he now helms, having taken over as CEO from legendary founder Michael Dell less than a year ago. "We think of it like our manifest destiny."

Dell has been knocking on the doors of corporate America for a long time, winning converts to its low-cost, high-quality business model, first at the grassroots PC level, then in servers, more recently with storage and networking products. And while Dell's corporate ambitions are well known, and its strategy to win mindshare and market share are basically unchanged, its current game plan, which includes a growing emphasis on technology services as well as a strong push into imaging and printing products, will let it reach further into the corporate environment. That, and overall business forces gathering steam for the past several years, such as cost cutting, standardization, and optimization, are positioning Dell as a central force in business technology.

As Dell becomes a bigger player, its influence increases, CEO Kevin Rollins says. Photo by Matthew Mahon

One way Dell is nurturing its corporate expertise is by looking inside. "We tend to look more like our customer than any of the other technology providers," CIO Randy Mott says.

Dell's 3,700-member IT department operates with a budget of 1.4% of total revenue. Dell's standard software stack includes Oracle, SQL Server, Linux, and Windows, with the choice boiling down to the best product for a particular problem, Mott says. A recently deployed order-management system in Europe runs Oracle and Red Hat Linux on six four-CPU Dell servers.

Dell's low-cost model might seem like the last thing that would lead to business innovation, yet that's what Rollins and Mott argue is a big part of the company's value proposition. The thinking goes like this: Money that isn't spent on IT infrastructure can be directed to other priorities that differentiate a business from its competitors. And money that's spent on IT infrastructure goes into systems that require less maintenance, freeing up IT staff to develop new software capabilities instead. "You have an opportunity to reduce costs and increase innovation," Mott says. "They're linked."

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