Critics are ragging on both Microsoft and Dell, once the mainstays of the desktop computer revolution, because apparently the revolution is over. The pundits think these companies should go off and abandon the consumer to better serve the enterprise.
No matter that both operations began and flourished as patrons of the consumer. And while it can be argued that both make more money from the free-spending enterprise operations, this is only true because of the strength of their consumer businesses.
The consumer side of the equation makes for a strong company more adaptable to changing market conditions. It also makes sales for enterprise easier since it is on the consumer side where you get your brand name recognition and notoriety. Without having a healthy consumer business and reputation, you become like Honeywell, NCR, or any number of once-famous brands.
Honeywell, which used to compete in computers and high-tech gear, eschewed the fast lane and fell into serving the enterprise. It gradually decided focusing on energy, safety, and security was best for the company. Is that what these guys want for Microsoft?
Honeywell's Dave Cote was named CEO of the Year by Chief Executive Magazine but few readers had ever heard of him. Perhaps he should take over Microsoft and pare down the offerings, turning Microsoft into the next Honeywell. Keep in mind, Honeywell was founded in 1885 and is worth $65 billion (£42 billion). Microsoft was founded in 1975 and is worth $265 billion (£172 billion). Golly, Microsoft must be doing something terribly wrong.
NCR goes back even further than Honeywell to 1884 and is a prime example of the walking dead compared with Microsoft. It has a market cap of a mere $5.7 billion (£3.7 billion) despite it being the progenitor of IBM and a dominant force in tech back in the day. Now it is in investor-friendly fields such as "hospitality." Dell, a company founded in 1984 – 100 years after NCR – has a market cap of $22 billion (£14.3 billion).
This is not to say that Microsoft and Dell must keep doing what they are doing, but what's the alternative? Listen to the investment community and slowly devolve into an NCR?
NCR has become less relevant than most start-ups. Its website looks like it was designed by a teenager. This is what over a hundred years of solid corporate experience brings? It's embarrassing.
Change the logo up at the top to a Dell or Microsoft one and you'll be looking at the future for these two companies if they accept the advice of the investment community and abandon the consumer market.