Singapore Exchange (“SGX”) has modernized its technology infrastructure with the help of Dell Inc. (DELL). The deployment of Dell’s futuristic technology enabled SGX to double the speed of its operations, thereby increasing its efficiency and reducing its operating costs.
This deal was a big win for Dell in recent times, as SGX is one of the largest stock exchanges in Asia and in the world.
The project requires Dell to provide end-to-end application modernization services and mainframe re-hosting technology. Dell is expected to help SGX's entire mainframe complex, which includes maintaining, clearing and settlement; third-party tools and utilities; and server and storage resources to provide a customer-friendly IT solution.
Dell is going all out to establish its credentials in the IT market again. The company may be expected to make several marketing and strategic moves to strengthen its business model. Its privatization is a positive, since it is likely to make the company more nimble and help it take tough decisions. However, it could have a negative effect on the company’s credibility.
These deal wins and privatization are likely to help Dell generate much-needed cash that the company could spend to pay off its private equity investors and service its debt.
Ever-increasing competition from companies such as Lenovo, Asustek, Apple Inc. (AAPL), Google Inc. (GOOG), IBM (IBM), Hewlett-Packard Company (HPQ), and Cisco Systems has restricted Dell’s growth prospects. The players are moving faster than Dell even in emerging markets that Dell is now targeting, so the going is likely to be tough.
We are also concerned about conservative tech spending, continued weakness in the PC market in 2013, declining revenues and competition from its peers. However, back-to-back product launches, a growing presence in the enterprise storage space and continuous deal wins seem encouraging.
Currently, Dell has a Zacks Rank #3 (Hold).
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