Leader: Dealing with Dell, increasingly

The Dell juggernaut continues to roll. The Round Rock, Texas PC giant has released results that show continued strong growth, pretty much across all the sectors it plays in. And that surely makes it more than a PC giant, right?

The answer to that is yes - and no. Speaking to silicon.com today a Dell executive said: "We're as diversified as HP or IBM. The historical perception is that we're lagging where we actually are."

We see that point, kind of. In enterprise computing, Dell's interests now indeed do span areas such as the big three eses: namely servers, storage and services. There is also what it calls its mobility business, covering things such as laptops and PDAs. And then there are the divisions that sell relatively new lines such as printers and flat-screen TVs.

Clearly the new areas are seeing the strongest growth. And, the latest earnings statement tells us, Europe and Asia-Pacific are the strongest growth areas geographically.

But let's flip this the other way round. Older areas such as PCs for businesses and the US market remain the mainstay: the biggest in terms of pure revenue.

Not that Dell is US-centric. It makes over two-fifths of its sales outside the US and has been in the UK for 18 years now. Other countries have seen it for a shorter time but they are contributing more and more.

And if we Europeans are seeing more and more of the vendor, let's not be surprised.

While many core components of products are priced in US dollars globally or are bought from the Chinese, with their currency pegged to the dollar, sales in pounds or euros have become all the more valuable to the CFO and company back in Texas over the past year.

Indeed the last annual rise in quarterly revenue for Europe, stated as 20 per cent, would translate as 14 per cent against a greenback that hasn't devalued, according to figures from Forrester Research.

The most interesting fact here seems to be the price elasticity of kit. Price cuts have resulted in a straightforward increase in sales. The harder question then becomes what happens when there isn't such a demand, as could happen during a downturn.

But then Dell also claims to have been there - post-Y2K refresh rates were at a low and so it concentrated instead on taking market share.

In short, the company says it wins either way. And increasingly it will be someone European IT departments will deal with, for various products.