The last few months have been quite the roller coaster ride for Dell. The company’s stock prices have fallen 17 percent to $12.49 – the largest one day decline the company has seen for twelve years. Overall, the share prices are down 15 percent for the year, making Dell the poorest performer in the Standard & Poors Index. This isn’t the first of bad news this year from Dell. The company’s first-quarter earnings and revenue also failed to meet analyst expectations.

Why is the once star performer suffering? People aren’t buying as many personal computers.  Some consumers are moving from traditional computers to tablets like Apple’s iPad or other mobile devices. Customers, including businesses, that want PCs are waiting until Windows 8 is released.  Dell’s president, Steve Felice, said that the Dell sales team has been focused on selling individual products instead of packages of hardware and software, which he plans to change.

Taking it in stride

Dell seems to be taking everything in stride. The company is pivoting from its consumer focus, which accounts for 20% of Dell’s revenue, to become a larger player in the enterprise. Earlier this year, the consumer division was moved under the small and medium business unit. Although sales of the company’s ultrabook, XPS 13, are more than double internal projections, the enterprise is where the big money is. Dell’s enterprise business has doubled in last six months, and Dell is focused on supporting the changing IT environment, which is now filled more than computers.

Dell will sell Windows 8 tablets and has announced it will offer phones by the end of the year. This is not an effort to woo consumer. The effort is a nod to consumerization where tablets and smart phones are just another tool to connect to the corporate network. Dell’s phones will have the same deployment, security and manageability features as other enterprise devices so mobiles users can go beyond just corporate email and connect to all enterprise software from CRM to internal portals.Dell has already been successful using this approach with tablets in the US Federal government. Dell enhanced Android with proprietary features required by enterprise customers. Dell is also entering the enterprises services market and offering businesses an alternative to large companies like Hewlett-Packared and IBM.

Dell is also in discussions to acquire Quest Software, which produces IT management software. This purchase is well aligned with Dell’s enterprise focused strategy and its recent purchases of Force10 Networks, SonicWall, EqualLogic and Compellent. These acquisitions will help Dell move beyond PCs to offer a more holistic portfolio of products and services.