Monday, September 24, 2007

Dell, Tele2 and Google: moving away from cheap services

This New York Times article will probably not reveal anything new on Dell, but it does ring a bell in the telco and internet world.

Basically, Dell is trying to overcome the end of the Dell model. This business model (build to order), together with a strong focus on the US corporate market, gave the company considerable scale, before it broke down. Now however, using its scale, it can 'simply' expand its strategy and hope to make a comeback.

Dell has numerous options: work with retailers, move abroad, turn to the consumer market; add notebooks, software and services; rationalize the company.

Tele2 provides a comparable evolutionary path, from low-cost reseller to fully-fledged quad play operator. It comes with quite a bit of pain, i.e. the sale of operations in many countries (Portugal, Belgium, France, Denmark, Hungary; Italy is next in line).

Finally, Dell and Tele2 could be providing roadmaps to Google. Most services are free + ads, and Google doesn't seem to overlook a single web-based service area. Again, get as many people as possible hooked on your (free) services, and then see how you can develop away from the ads model.

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