FEW people are bullish on the personal computer market at the moment. After years of comfortable profitability and growth, PC manufacturers are scrambling to adapt to a world many believe has left them behind. Sales have been squeezed by both the spread of internet-connected smartphones and, perhaps more significantly, tablet computers.
Speaking in 2010, the same year he took tablets mainstream with the launch of the iPad, Apple’s late chief executive Steve Jobs heralded the arrival of what he called the post-PC era, a phrase now common on the lips of Silicon Valley’s hardware makers and Wall Street analysts. “I think we’ve embarked on that change,” Jobs said. “Is it the iPad? Who knows? We like to talk about the post-PC era, but when it really starts to happen, it’s [going to be] uncomfortable.”
It has taken a couple of years for things to really get uncomfortable. The PC industry suffered its first decline in global sales for over a decade last year. This was followed by a 14 per cent slump – the biggest on record – in the first three months of 2013, and the industry’s mooted saviour, Microsoft’s radically-redesigned Windows 8 software, being deemed a failure akin to Coca Cola’s New Coke.
The Post-PC era has now led to a multi-billion dollar takeover battle for one of the biggest names in personal computers: Dell. The company revealed a 79 per cent fall in profits last week, as it suffered more than most from falling PC sales, and it is now chief executive Michael Dell’s mission to follow in the footsteps of that once-mighty hardware maker IBM and transform the business he founded from a lumbering hardware giant into a leaner software firm.
But before Michael Dell is able to do this, he will have to win a well-publicised Wall Street battle to convince shareholders to approve his takeover plan, and while this rages, the rest of the firm is betting on an improvement in Dell’s fortunes.
“The market has continued to be challenging for a while now, I don’t think we see that changing tomorrow,” says Dell’s Neil Hand when I meet him on a rare trip to London from the company’s base in Texas. “But the PC products that are out there are starting to age pretty significantly so I think we have to really think about how long before people start to replace them, because they’re starting to fail.”
Hand, who first joined the company in 1988, four years after Michael Dell founded it in his college dorm room, is Dell’s vice president for Global End User Computing, a position that sees him responsible for much of the firm’s PC division and its burgeoning tablet arm. Talking to Hand, it becomes clear that he refuses to accept the narrative that PC sales will continue to slump or that there is little place for the likes of Dell as Apple and Samsung swallow up tablet sales. He also denies that Windows 8, which runs on Dell’s computers and tablets, has been a failure, saying that it has the edge among the millions of business users who have historically relied on Microsoft’s software.
“Commercial accounts are really concerned about [working] with iOS or Android tablets because they don’t know how to manage it, they need to get new skills on board which generally means extra headcount, and in a challenged economic environment it just wasn’t happening,” Hand says. “Now with Windows, it is the operating system of choice in that environment so people are going ‘Oh great I can start looking at it,’ and we’ve started to see significant change.
“Putting tablets aside, I don’t think we’re going to see [PC sales] decline at the rate they’ve been declining over the last couple of years. There have not been as many [Windows 8] touchscreen PCs on the market as we would have liked which has sort of made it a little difficult, but that’s changing. It’s just a matter of time before people see.”
Hand remains convinced that whatever happens with Michael Dell’s takeover battle, the company is set for a turnaround, and that the protracted negotiations have not affected morale. “The energy level is very high, the commitment level is as high as I’ve seen it including years previously when Dell was in an extremely strong market position, the employees and certainly I believe the strategy we’re on is a winning strategy and it’s our job to execute that flawlessly.”
CV NEIL HAND
Lives: Austin, Texas
Position: Global vice president of End User Computing division, Dell
Past career: 1983-85: MPI, Sales support executive.
1985-88: Epson, UK, Business manager of Laser Printers division
1988-91: Dell, UK, Product marketing management
1991-97: Dell, Austin, Product marketing management
1997-98: Director of Precision Program Management
1998-2001: Director of WW Marketing Division
2001-2007: Vice president of WW Marketing Division
2010-2012: ME Television, Austin, General Manager
2012-Present: Dell, current position