As the above chart shows, DELL shares dropped of a cliff in 2008 when they announced lower revenues again after several bad quarters. From then to now they have underperformed the NASDAQ consistently. Now lets look at acquisitions.
Its clear from their acquisition strategy that they are intending to become a service provider to the Fortune 1000 and global companies.
- 2006 Acquired Alienware the technical leader in advanced computer design. The last acquisition that had anything to do with computer sales.
- 2009 Perot Systems for $3.9bn, Perot is one of the most successfull service companies to the Fortune 500
- 2010 KACE Networks specialists in systems management software
- 2010 Attempted to buy 3PAR a data storage specialist but were beaten by HP
- 2010 BOOMI a specialist in systems as a service (SAAS)
- 2011 Compellant a competitor of 3PAR in data storage
- 2012 AppAssure a back up and security company for large companies
- 2012 Sonicwall a leader in security for network centres
The share price has not reflected fully this new direction. It has risen, but despite very good results quarter on quarter reflecting the success of DELL's efforts Wall St is not valuing this company properly. Of course integrating these acquisitions may present challenges, but the Perot buy is driving the changes and they have the skills to do this.
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