International Business Machines Corp

CEO Michael Dell said on Wednesday the computer maker will focus on "midmarket opportunities," including small and medium businesses in the public sector and the healthcare industry as the company looks for long-term revenue growth of about 7 percent.

Key investor concern

Addressing a key investor concern, executives at an annual analyst conference said they expect to sustain recent improvements in gross margins, and continue to see strength in corporate information innovation upgrades.

The company, which is diversifying its revenue base in the face of weakened consumer demand, has enjoyed renewed favor from investors afterwards quarterly results rose and it raised its 2012 outlook in May on strong corporate sales and improved profitability.

Dell, which did not update its forecasts for fiscal 2012 at the conference in Austin, Texas, has been trying to move into fast-growing tablet and smartphone markets and such businesses as data center equipment.

Storage and service remain a key area of growth for the company. Dell expects revenue from storage to grow 15 percent to 20 percent a year on average in the straightway four years, and revenue from services to expand an average 7 percent to 9 percent a year over the same period.

Dell, which has steadily conceded market share to Hewlett-Packard Co and Acer Inc in past years, has shown progress on improving margins by moving into higher-margin businesses.

Dell is looking to expand its services business in Europe and Latin America, executives said. Dell on Wednesday forecast revenue of $4 billion to $5 billion in storage by fiscal 2015, up from $2.3 billion in fiscal 2011. And it expects its innovation services business to generate $10 billion to $11 billion in the same period, from $7.7 billion last fiscal year.

Dell as well is increasingly using acquisitions to help it be a one-stop shop for corporate information innovation needs, snapping up about eight companies in its last fiscal year, including information-security company SecureWorks Inc.

With Dell continuing to face competition in data center computing from companies like International Business Machines Corp and HP, the company said it remains on the hunt for small to mid-sized assets that can furthermore its ambition of becoming a one-stop shop for corporate research needs.

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