Dell Goes Small In Storage

BURLINGAME, CALIF. -

After nearly a year of lying low as his eponymous company wrestled with its books, Michael Dell is hoping to burnish the computer maker's profile.

Dell appeared in San Francisco on Monday to announce the Round Rock, Texas-based company's latest product, the MD3000i storage system. Starting at $7,000, it’s aimed at winning more business from the small and mid-size businesses snapping up Dell's personal computer-based servers.

Dell (nasdaq: DELL - news - people ) competes ferociously with IBM (nyse: IBM - news - people ) and HP to sell servers based on Intel (nasdaq: INTC - news - people ) and AMD's so-called x86 chips to businesses, and Dell's announcement is aimed at soaking up as much additional business from these customers as possible.

And while Michael Dell lacks the charisma of Apple (nasdaq: AAPL - news - people ) chief Steve Jobs, the rising profile of the Dell founder in recent weeks shows that the company is moving steadily to put the ugliness of the past few years behind it. In February, he replaced struggling Chief Executive Kevin Rollins. Sales were lackluster. In May, the company said it would cut 10% of its workforce, or roughly 8,800 employees. Finally, after a year of internal investigations, the company said in August that some managers had fudged quarterly results between 2003 and 2006 to meet sales targets. The amounts — between $50 million and $150 million —are small when contrasted with Dell's billions of dollars in earnings during that time. But it was a sign that pressures within the company had become so intense that managers felt compelled to cut corners.

Michael Dell has said he wants the company to refocus its priorities on long-term objectives. He is setting the tone by sticking to calm, upbeat rhetoric. When asked by a reporter about demand for technology at financial institutions in the wake of the subprime meltdown, Dell said, “business is looking pretty good.” When asked if he was ready to steer a company of Dell’s size, after his stint as chairman, Dell said, "I feel confident I can lead this company now in and in the future.” In response to another question, about where in his competitor’s product lines he expects the MD3000i to do the most damage, Dell replied blandly that “the target is really our customer.”

Dell's most recent numbers have been strong: Driven by server sales and helped by cheaper component prices, Dell expects to post a 46% increase in earnings for its second quarter when compared to the previous quarter. (Those numbers will remain preliminary until early November, when Dell is expected to restate its results for fiscal 2003 through early 2007.) The company remains the subject of a probe by the U.S. Securities and Exchange Commission over its accounting.

In a question-and-answer session with reporters Tuesday, Dell laid out two themes that he hopes will reinvigorate sales: slashing the costs of information technology for businesses and widening its product portfolio. The MD3000i is part of that effort — Dell managers claim it promises customers more capabilities at lower costs. At the same time, since the new storage systems use the so-called small computer system interface (SCSI) networking standard, it won't compete with the fiber-channel products built by EMC (nyse: EMC - news - people ) that Dell has been selling to its customers.

Dell is also tweaking its consumer efforts. It has added a splash of eight colors to its lineup of laptops. It is selling PCs at Wal-Mart (nyse: WMT - news - people ) and Sam's Club in north and south America, at Carphone Warehouse in the U.K., and at Bic Camera in Japan. "In the quarters ahead you'll see several additional key retailers," Dell predicted. He also boasted Tuesday that demand for Dell's new notebooks has exceeded the company's supply.

"We have a couple of products coming out over the coming months that will increase that brand lust," said Dell Chief Marketing Officer Mark Jarvis. "Watch this space."