Dell’s stated intention to improve its 30%-plus service attach rates, which are among the highest in the PC industry, highlights its commitment to establishing its services business as a profit engine on par with its PC hardware business. Its PC hardware business is surging as sales of its premium PCs, particularly notebook PCs from its XPS family, remain brisk despite heightened competition from HP Inc., Lenovo, Asus and Acer.
Dell’s global rollouts of enhanced commercial and consumer PC services over the last year outlined the role services will play in Dell Technologies’ PC business. The importance of these assets to Dell’s Client Solutions business and direction of Dell’s post-PC hardware ambitions were solidified at Dell EMC World 2016.
Services are exerting greater influence in PC markets, particularly in commercial and enterprise segments; hardware-centric sales models still exist but are becoming obsolete as the bulk of hardware differentiation among PC manufacturers shrinks. Additionally, with PC price wars largely abated, Dell is turning its attention to maximizing profit per sale, abandoning the volume-centric sales strategies that propelled its growth in the past, as they are out of sync with the dynamics of the PC market in 2016.
Services have long been a featured component of Dell’s PC value proposition, and implementing a service-led business model will transform routine, transactional hardware sales into opportunities for Dell and its partners to reap more profit per sale and will enable Dell and its partners to better adapt to changes in the global PC market.
Jack Narcotta
Senior analyst, TBR
