) has entered into a strategic alliance with
). The two are teaming up to introduce a new x86 infrastructure,
which will help customers of both companies.
The solution will combine Oracle's software with Dell's
hardware, which will enable organizations to manage applications
faster and also to improve the performance, flexibility and
efficiency of the system.
Through this partnership with Oracle, Dell is trying to
simplify its IT infrastructure and reduce the integration costs
of delivering its hardware and software as a bundle. Offering a
combination of Dell and Oracle x86 infrastructure support
functions will provide a single point of contact for
Although Dell is making an attempt to work its way up by going
into collaborations and securing deals, the company is faced with
the same PC market concerns that have struck its peers. Dell's
over-dependence on the segment (still around 70% of revenue) has
been a matter of concern for long and is likely one of the
reasons it was driven to go private.
Senior management of the company is of the opinion that Dell
is facing its biggest challenge in the Consumer and Notebook
Revenues from the Consumer Business declined by 20.0% in the
first quarter of 2014, which is a substantial fall compared with
the other segments.
The company has to adopt innovative strategies, and explore
other businesses to reduce its over-dependence on PCs. The
collaboration with Oracle is one of the strategies that the
company is adopting.
In spite of all the strategies, the headwinds faced by the
company make us apprehensive about its future. In the past year,
the company has had its share of challenges in the form of tough
), as well as a restricted spending environment which hurt
However, we expect new deal wins and privatization to help the
Dell Inc. has a Zacks Rank #5 (Strong Sell).
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