Lack of R&D Is Big Problem for Dell

ZDNet on February 02, 2007

Dell built its business on financial efficiency, and specifically on making money off raw supplies before it had to pay for them, opines ZDNet's David Berlind. Now that Dell's competitors have narrowed the efficiency gap by improving their supply chain management, Dell is suffering because of its lack of innovation. Much of Dell's R&D takes place through suppliers like AMD, ATI and NVIDIA, and thus is a commodity that is equally available to its competitors. Weak R&D is harming Dell's efforts to make headway in the server and networking infrastructure markets, where innovation leaders like HP and IBM are eating its lunch. Dell is still trying to talk folks into scaling out their infrastructures, says Berlind, despite growing concerns over energy usage and the increasing popularity of virtualization.