Information Technology ( IT ) major Dell Inc. ( DELL ) recently announced that it has found a new taker for its "Dell OEM Solutions". The company has struck a deal with Panama-based small-business start-up Gratifon S.A., whereby Dell will provide its industrial OptiPlex XE PCs and cloud services. Dell's technology will be used in Gratifon's 50 kiosks, enabling them to provide free sponsored phone calls to residents and tourists in Panama. Moreover, Dell's OEM solutions will facilitate Gratifon to focus on new business strategies aimed for future growth
Gratifon was essentially on the look out for PCs that would withstand the humid, hot weather of Central America to power its kiosks. Consequently, the company has chosen Dell OEM Solutions' industrial OptiPlex XE PCs, which offers better lifecycle for a minimum period of three years and can operate efficiently in higher temperatures. OptiPlex XE PCs come with lower field maintenance costs with component-level stability and standards-based remote management and facilitates steady performance required to make quick calls, run high definition video and enhance user experience.
We believe that this is solution is expected to attract other industrial customers as well and has the potential to increase the business volume. Moreover, the company is planning to roll out new servers to attract new customers in this segment.
The company has recently upgraded its portfolio of blade, rack and tower PowerEdge servers for use in demanding enterprise environments. The company continues to add new features to improve the efficiency and functions of the server. The new range of servers is expected attract customers from the small businesses to hyper-scale data centers and can improve the efficiency of their business operation.
Apart from industrial application and storage, Dell has also expanded its networking capabilities with the acquisition of Force 10 Networks in July last year. Overall, we notice that the tech giant is evolving as a comprehensive provider of PC solutions to the enterprise segment. We believe that this approach is exactly what is expected of Dell to compete against the likes of Cisco Systems Inc. ( CSCO ) and Hewlett-Packard Co. ( HPQ ).
Though we understand that soft demand in the Consumer segment, a high debt level and stiff competition from technology majors will remain concerns, we believe that Dell will successfully capitalize on increasing IT expenditure and exhibit top-line improvement going forward.
Currently, Dell has a short-term Buy rating, as indicated by the Zacks #2 Rank.
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