PCs may not be a high-growth market, but they're still important to Dell's customers, especially small and medium-size businesses, Dell's CEO says.
FORTUNE — Michael Dell’s year-long battle to take his company private was one of the fiercest business brawls in recent memory. The chairman and CEO of Dell managed to rebuff activist investor Carl Icahn’s takeover attempts before shareholders approved the $25 billion buyout last September. What might be even harder for Dell now is figuring out what to do with the company, whose quarterly results prior to its privatization showed earnings of 25 cents per share, down from 50 cents a year earlier.
Nonetheless, Dell wanted his business back for a reason; he has a vision for the company he founded in his dorm room 30 years ago, and after appearing at the Fortune Brainstorm Green conference earlier this week, he shared his plans about the company’s future.
Here’s an edited excerpt of our chat:
Big question here: Now that Dell is once again your baby, what do you have planned for the company?
We have been for the last five or seven years growing our business around creating end-to-end solutions for our customers, and that really involves more than what we started with, which was hardware. We’ve built a more than $20 billion business in new areas of software services, data center, security and we continue to invest in those areas. And what that does is it allows us to solve a much broader set of problems that customers have and opens us up to a much larger market.
With such a focus on software and services, where does the PC fit into your business model and do you ever foresee it not being a part of Dell’s strategy?
No. It’s hard to provide end-to-end solutions if you don’t have both ends. We’re number one in commercial PCs in the United States and this last quarter our share in the business grew faster than at any time since 2006. That market may not be a high-growth market, but it’s certainly important to our customers, especially — small and medium-size businesses. It used to be that if you had IT in any serious way you were a big company because it was expensive, but it’s gotten much more affordable. In the U.S. that’s sort of empowering in tens of millions of small- and medium-size companies and Dell serves a very high percentage of those companies and has for many years. Their needs start out as, ‘Hey we need some tablets we need some notebooks, we need some desktops.’ That’s often a way for us to introduce ourselves to that customer and then expand that relationship to a broad range of things.
Earlier this week, Microsoft CEO Satya Nadella and Surface Computing head Panos Panay said the laptop-like tablet will kill the laptop in the traditional sense. How do you respond to that?
I think there’s been some reconsideration that has gone on among customers. They’ve said, ‘A tablet may be great, but does it really replace the productivity device that I use?’ For some people maybe it does, but for most of them not really.
How has Dell’s tablet performed?
From the first quarter of last year to second quarter our tablet sales doubled and then from second quarter to third quarter, they doubled again. Then they tripled from the third quarter to fourth quarter. The fastest growing categories of tablets are Windows and Android, and we’re in both of those.
Speaking of tablets, how do you see Dell fitting into today’s mobile landscape? Will we ever see the Dell cellphone?
I think you sort of have to step back and ask a fundamental question of do you want to do everything for every customer, every time, everywhere? It’s probably not the best strategy so we choose to be a bit more focused. Phones are exciting and shiny but if you look at that business, there’s no shortage of competitors so let’s go do some other things. We’re investing much more in software, security, data centers.
You’ve said Dell is doing well. Can you provide any top line numbers that give more insight into how the company is performing?
We’ve seen data from large integrated IT companies so far this quarter, and I can say definitively that we’re the fastest growing of all of them. Business is growing. Cash flow is strong.