UPDATE 1-Dell to focus on services expansion as demand recovers

* M&A to focus on geographic expansion of services business

* No huge acquisitions in near future after 3PAR battle

* Services to make up 25 percent of China revenue in 3 years

* Demand for PCs has recovered to pre-crisis levels
(Adds details, quotes)

HONG KONG, Nov 4 (BestGrowthStock) – Dell Inc (DELL.O: ), the world’s
No.2 PC maker, will focus its M&A activity on expanding IT
services in specific markets as it diversifies beyond its core PC
business, a senior executive said on Thursday.

The company would not concentrate on making huge acquisitions
in the near future, Steve Schuckenbrock, global president for
Dell’s large enterprise business, told a news conference.

“Services expansion on a geographic basis is a priority,” he
said. “China is high on that list.”

Schuckenbrock’s comments come after Dell engaged in a bidding
war with rival Hewlett-Packard Co (HPQ.N: ) for high-end storage
maker 3PAR, with HP ultimately winning the $2.4 billion battle.

Dell announced it would buy cloud-computing services company
Boomi earlier this week to shore up its ability to provide
software over computer networks, in a move it says will help
smooth data transfers between programs. [ID:nN02226898]

Dell also aimed to have its services unit in China contribute
up to 25 percent of its revenue there in three years, up from
about 10 percent now, said its China Vice-President Alex Yung.

PC companies have increasingly been looking to mobile devices
and IT services to diversify away from the heavily commoditised
personal computer, where net margins can fall to the low single
digits for companies such as Acer Inc (2353.TW: ).

Demand for Dell’s services was also returning to pre-crisis
levels as companies look to perform system upgrades that were put
off in the past two years, Schuckenbrock said.

“I think a lot of spend we see today is a ‘spend to save’
mindset,” he said. “That is a substantial driver of the growth
we’re seeing. It started in the third quarter of last year and I
still see it at this point.”

Dell and Lenovo Group Ltd (0992.HK: ), which are heavily
reliant on corporate spending, were harder hit during the crisis
as companies squeezed their technology budgets.
(Reporting by Doug Young and Kelvin Soh; Editing by Chris Lewis)

UPDATE 1-Dell to focus on services expansion as demand recovers