Last week we asked our social media audience for questions around our overall strategy. We received a lot of great questions. Our answers to several of the questions can be found below. Many of the other questions were answered during our Q2FY12 Earnings Call which can be replayed in the webcast found here. Thanks for all the great questions!
Enterprise Solutions and Services
Q (1nvestor): What business segment will garner the largest percent of your expansion efforts in the next two years?
A (Dell IR): We have a great storage business, strong data center networking IP with the pending acquisition of Force10 Networks, and a strong services platform that are well positioned to be bigger contributors to the portfolio in the future.
Q (jjstockpicks): How can you convince the street that your focus lies in managed services and enterprise technology not consumer low margin PCs?
A (Dell IR): Our Consumer business is healthy and growing and continues to be an important part of our portfolio. That said, the growth you have seen in our services, server, networking and Dell IP storage businesses are excellent indications that these are key areas of focus. The investments we have been making in sales and R&D in these areas is further evidence that these will continue to be key areas of focus going forward.
Q (howardlindzon): I’d love to get some feedback from the top on the Google/Motorola acquisition.
Q (ppearlman): How might the Google/Motorola deal affect your tablet strategy going forward?
A (Dell IR): Having Android with a stronger ability to exhaust patent claims against it probably sets up for an interesting competitive dynamic. We're obviously still quite interested in Android, but Windows 8 on the tablet side is also pretty encouraging.
Q (downtowntrader): Are there any plans to continue with streak 5 development?
Q (ivanhoff): How is Dell impacted by the patent lawsuits between sellers of Android powered devices and Apple and Microsoft?
Q (CheckOutJared): With the increase in growth in mobile do you see yourselves becoming a player in that segment?
Q (weissben): What is Dell’s mobile strategy going forward? Will we see new handsets sold via Verizon, AT&T, Sprint, or retail stores (Best Buy)?
A (Dell IR): Our mobility strategy is focused on delivering comprehensive solutions for our core customer base – commercial customers and prosumers – via multiple channels. Over the next 12 months, you’ll see us launch a differentiated portfolio of tablets and smartphone solutions designed with these customers in mind.
Q (StockSage1): Have you seen any negative effects from the Eurozone sovereign debt crisis on your European order book? What kind of year over year declines in Federal government and municipal spending are you inputting into your revenue forecasts?
A (Dell IR): Throughout the year both U.S. and western European Federal governments have shown reduced spending with much of this tied to budgetary constraints. The pipeline of opportunities heading into the U.S. Federal fiscal year end of September 30th is very good, but timing of closure can vary based on budgetary and macroeconomic drivers.
Q (jscastellano): Have you seen any cancellation or delay of orders by customers suddenly more cautious as result of recent market volatility?
A (Dell IR): Based on what we’ve seen over the past couple of months, commercial demand remains good overall and the corporate refresh remains a key driver of demand.
Q (PeterLBrandt): To what degree is the 11-yr trend in the shares of Dell, Microsoft and others due to Apple’s success? How to you turn the ship?
A (Dell IR): We believe we have the right strategy in place to win and deliver growth in operating income and cash flow consistently over time. We’ve executed well against this strategy over the last year and are positioned well to provide our customers with productivity enhancing solutions and higher value client products.
Q (jscastellano): What do you think your optimal level of debt is? What are priorities for the potential use of your $14B in cash?
A (Dell IR): We have a disciplined capital allocation approach to balance strategic organic and inorganic investments, stock repurchase and availability of cash based on geography.
Q (jayzalowitz): I hung out recently with your CEO on $GOOGLE plus, how has grasping the social media landscape affected sales?
A (Dell IR): We always see a lot of value in connecting directly with our customers and social media enables that.
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