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12/19/2012
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6 Dell Storylines To Watch In 2013

With Tuesday's purchase of Credant, Dell has bought 19 companies in the last four years. But what does all the activity mean for the company's future?

Windows 8: 8 Big Benefits For SMBs
Windows 8: 8 Big Benefits For SMBs
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Dell has spent around $13 billion on 19 acquisitions since 2008. This buying spree has included more than $5 billion in the last year alone, with Tuesday's purchaseof data-protection specialist Credant Technologies representing the most recent addition to the Dell portfolio.

Company founder and CEO Michael Dell assertedduring December's Dell World conference that all the activity has helped turn his namesake into an end-to-end IT service provider. By and large, his words ring true; the company enjoyed enough success in 2012, most notably in servers, to substantiate its role as a major player. Nevertheless, haziness surrounds the company's ability to compete with HP, IBM, Oracle, Cisco and other wide-reaching industry powers.

Here are six 2012 trends that will define how Dell continues to redefine itself in the new year.

1. Slumping PC Sales.

Dell made its name by producing affordable PCs, but this one-time cornerstone is now one of the company's biggest sources of uncertainty. To be fair, the PC market as a whole lost steam in 2012, thanks to not only a slowdown in sales prior to the release of Windows 8 but also increased competition from smartphones and tablets. Even so, Dell was hit particularly hard, shipping fewer units and securing less of the market in 2012 than it did in 2011.

[ How successful has Dell been in broadening its appeal? Read Dell's 'Transformation': Customers Speak. ]

Michael Dell has expressed faith in the company's ability to rebound in the PC space and gain traction among tablet users. At Dell World, for example, he predicted that Windows 8 and its touch experience will help PCs, particularly convergence devices, to claim a chunk of the BYOD market. Unlike other Windows releases, which could be installed on any machine with adequate processing power, the new OS's fate is indeed bound to new PC sales -- its tactile functions will take over the enterprise only if businesses embrace touch-friendly hardware. With many companies still recouping Windows 7 investments, the new machines will need consumer popularity to make this happen. Dell has brought to market a variety of new devices intended to both maximize the benefits of a touch-based OS, and, with its laptop-tablet hybrids, cater to increasing demands for mobility. Even so, Windows 8 has been seen as a gamble for both Microsoft and OEMs, and early sales numbers haven't succeeded in turning the tide. Forecastssuggest PCs will return to modest growth in the future, but industry watchers will need to wait until 2013 to see if Dell leads the charge.

2. Ups And Downs In Storage.

On one hand, Dell performed very well throughout 2012 in certain storage segments, such as the iSCSI SAN market. It also earned high marks in InformationWeek's storage evaluation. On the other hand, the company experienced overall revenue declines in the space, lost storage chief Darren Thomas, and prompted questions about its breakup with market powerhouse EMC. While amassing the mixed record, Dell continued to introduce new storage products and tout the ROI benefits that its modular upgrade path offers SMBs. The company additionally broke into the converged infrastructure networking and server business, which could produce trickledown benefits for its storage sales. The mid-market space that Dell's business strategy targets has attracted attention from companies such as Netapp, however, so Dell's storage outlook for 2013 is still ambiguous.

3. Inroads In Servers.

Midway through the year, Dell was one of the bright spots in an otherwise uninspiring server market. The most recent figures reveal that Dell has accelerated this momentum to achieve its best performance to date, including success among not only its bread-and-butter SMB clients but also high-end customers. Future success, though, will rely on its Active Systems converged infrastructure platform, which was unveiled in October by Marius Hass, Dell's newly-minted president of enterprise solutions and a veteran of competitor HP.

Michael Dell acknowledged the importance of convergence during Dell World. Indeed, a variety of factors -- virtualization, cloud computing, energy and space consciousness, the demand for automation and reduced administrative burdens -- have positioned this consolidation of server, networking and storage functions as the data center infrastructure of the future. Haas said at the Active System launch that the new platform compares favorably to competing systems, such as Cisco's UCS. These claims have yet to be tested against market preference, however, and Cisco hasn't stood pat with its offerings. HP is also a force in this area, so Dell's new line will have to prove itself if the company is to continue its strong server growth.

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