How Google Can Help Dell Reboot Its Business

Last Updated Jun 22, 2010 2:39 PM EDT

In the three years since he returned as CEO, Michael Dell has failed to turn around the company that bears his name. But news that Dell (DELL) wants to switch operating systems from Microsoft (MSFT) Windows to Google (GOOG) Chrome highlights a tremendous opportunity for the faltering computer maker to reboot its business.

Google's Chrome OS will offer Dell several advantages over Microsoft Windows.

  • Cost: Dell has already said that the cost of Microsoft Windows is an issue for its customers. Not only is Chrome free, but it would allow Dell to focus on producing cheaper, less powerful machines.
  • Integration: Consumers want devices that play well together. Dell needs to produce laptops that can sync easily with its new offerings, like the Streak tablet.
  • Mobile: Google's Android is already running on more phones that Apple's (APPL) iPhone OS. Microsoft's mobile offerings have been a flop. Dell is smart to cozy up to the winner of this rapidly growing sector.
Michael Dell has been a ruthless cost cutter since returning to the company in 2007, when the firm lost its position as number one in PC sales. The company eliminated tens of thousands of jobs and outsourced more than half of its production as it shut down local factories.

But the company's attempt to return to growth have been hampered by the rising cost of components for its core PC business. According to Business Week, Dell's gross profit margins have narrowed for several quarters in a row and the company's stock price has fallen by more than half since Michael Dell returned as CEO.

That's why yesterday's news that Dell is in talks with Google was so important. The company is not going to be able to rejuvenate itself by focusing on hardware. It needs to embrace the future of personal computing: cheap, web centric and spread across multiple devices.

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  • Ben Popper

    Ben Popper writes at the intersection of culture and technology. His work has been published in the NY Times, Washington Post, Fast Company, Rolling Stone, The Atlantic and many others. He lives at www.benpopper.com.