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A brutal logic to Dell’s reinvention: Eric Auchard

-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

By Eric Auchard

Michael Dell in New DelhiLONDON, July 22 (Reuters) - Dell Inc needs to reinvent itself to cope with falling margins for key products and a spate of mergers which are rapidly reshaping the competitive scene.

So the computer maker's moves into business services that help customers slash costs rather than add new programs look promising, given that every company under the sun is chasing this goal.

The other shift in Dell's favour is that corporate buyers look ready to start spending again on technology to generate new business, albeit at lower levels than before.

There is a brutal logic to Dell's reinvention. Personal computers are becoming low-cost commodities, yet still produce 60 percent of the company's revenue.

Dell is showing a willingness to cannibalize its existing hardware business in favour of higher-margin software and services businesses.

What on earth is ‘cloud computing’?

Silicon Valley billionaire Larry Ellison shed a little sunshine on “cloud computing” on Thursday at a financial analyst meeting held by Oracle Corp, the software company that he founded and runs (when he’s not making into the headlines for his more nautical pursuits).

We’ve redefined ‘cloud computing’ to include everything we currently do. So it has already achieved dominance in the industry. I can’t think of anything that isn’t cloud computing.

The computer industry is the only industry that is more fashion-driven than women’s fashion. Cloud Computing. I remember I was reading W and I read that orange is the new pink. And cloud is the new SaaS. (Software as a Service) Or cloud is the new virtualization. It is the most nonsensical. I mean I read these articles … I have no idea what anybody is talking about. I mean it is really just complete gibberish.