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Dell bets on pre-packaged data center systems for corporations

A company logo of Dell is seen on the cover of its laptop at a Dell outlet in Hong Kong October October 21, 2009. REUTERS/Bobby Yip
A company logo of Dell is seen on the cover of its laptop at a Dell outlet in Hong Kong October October 21, 2009. REUTERS/Bobby Yip

SAN FRANCISCO (Reuters) - Dell Inc is betting that companies would prefer to buy pre-packaged systems to establish data centers, launching a product that combines the company's server, storage, network and software products as the No. 3 PC seller looks to expand in the lucrative enterprise sector.

Dell's new enterprise business chief Marius Haas said Dell intend to push ahead aggressively to grab a bigger portion of the $110 billion market catering to the technology needs of corporations.

The company in an event in San Francisco announced its "converged infrastructure" product called Active Systems, which is pre-configured infrastructure that can used to set up virtual desktops and private remote-computing capabilities.

Dell has been actively buying companies to expand its offerings to corporations, diversifying away from personal computers, a market whose growth is decelerating as Apple Inc's iPad and other mobile devices pull customers away.

The company is undertaking a turnaround even as global tech spending appears to be slipping. To shore up margins and generate revenue growth, Dell is trying to expand further into enterprise computing, where it then goes up against larger rival Hewlett Packard.

Haas said Dell has invested $12.7 billion in acquiring companies to bolster its products in the enterprise market. Some of Dell's acquisitions in this sector include SonicWALL and AppAssure.

The former HP networking executive, who joined Dell in August from private-equity firm KKR & Co, is leading a unit that accounts for over 30 percent of the company's total revenue and more than 50 percent of its margins.

The business was a rare bright spot in Dell's fiscal second quarter, with enterprise revenue rising 6 percent to $4.9 billion.

"Investors are underestimating Dell's enterprise potential," Haas said in an event in San Francisco.

(Reporting By Poornima Gupta; Editing by Tim Dobbyn)

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