Dell Inc. (DELL) is winning number of deals recently and has now won a deal from the United States Navy Medical Logistics Command and the United States Army Integrated Clinical Systems PMO. These U.S. departments will implement Dell's Unified Clinical Archive (UCA) solution. This particular task order is a part of the Digital Imaging Network Picture Archiving Communications System III (DIN-PACS III) contract. The task order has been given to Brit Systems team, which comprised Dell and Acuo Technologies. The total order is worth $45 million. The contract will let the Army and Navy share Picture Archiving and Communications Systems (PACS) images between military bases and branches worldwide. They will be able to access and share medical images for 49 hospitals, with the help of Dell and its partners.
The growth of Electronic Health Records (HER) began with the federal government announcing an incentive for the same in February 2009 whereby, the Obama administration approved the spending of $30 billion in economic stimulus money, which will ultimately help the doctors and hospitals buy the equipment needed to convert medical record-keeping from paper files. Dell is constantly benefiting from this opportunity.
Not only is Dell winning deals at a good pace, but it is also getting repeat orders from its existing customers. Dell is also coming up with other strategies to strengthen its foothold in the market. The company has recently added two new touch screen devices to its flagship series of XPS laptops. The XPS 10 is a Windows tablet, whereas the XPS Duo 12 Ultrabook falls somewhere between a tablet and a laptop.
The two devices have received encouraging reviews for their robust hardware design and good performance. This will help Dell win some big ticket corporate customer and will help the company improve its customer base.
We understand that the shift to the higher-margin enterprise business is critical to Dell's survival and success. For the past few quarters, Dell's financial results have failed to impress investors and we believe that the main reason for the disappointment was the delay in the order renewal process. However, keeping in mind the increasing demand for cloud solutions we are cautiously optimistic about Dell's progress in the future.
Currently, Dell has a Zacks #3 Rank (short-term Hold rating). Although the company is exploring new sources of revenue through acquisitions, it expects further decline in PC shipments. Moreover, competition faced by the company in the SMB and server segments from players like Hewlett-Packard Company (HPQ) and Cisco Systems Inc. (CSCO) is also a concern.