Time to Sell Dell, Buy Cisco and HP

NEW YORK (TheStreet) -- Giving computer giant Dell(DELL) the benefit of the doubt is something that has always come easy for me. However, while its chief rival in Hewlett-Packard(HPQ) is seeing light at the end of the tunnel, Dell makes me think that the light that it sees is an incoming train -- one that it simply is unable to avoid.

On the heels of another disappointing quarter for the company, I think Dell has now reached a point where it needs to reassess its strategy and start thinking about its future. As bad as things once looked for the company, Wall Street is starting to get a sense that things just may be getting worse.

The company reported first-quarter earnings of 43 cents per share on revenue of $14.4 billion. This compares to analysts' estimates of 46 cents per share on revenue of $14.9 billion. So not only did the company miss on both the top and bottom lines, but revenue arrived 4% lower than the same period of a year ago while also demonstrating declines in some key segments.

For example, aside from the fact that a decline was seen in its large enterprise revenue which came in at $4.4 billion, the company also continued to lose in that once-special consumer market where it lost 12% in the quarter to $3 billion. What this says is that as it is losing consumers to Apple(AAPL) , it is also struggling against the likes of HP and Cisco(CSCO) to keep its footprint in the enterprise.

During the announcement, the company talked about its transition away from PC sales while citing revenue increases in areas such as storage, servers and network equipment and services. The company's CEO, Michael Dell said, "We're committed to continuing our strategy to reshape Dell's business as an end-to-end IT provider."

It all sounds great, however these are key markets that are already dominated by names such as EMC(EMC) and IBM(IBM) as well as HP and Cisco. Its earnings already suggest it is not competing effectively in areas it once dominated, so it is a bit challenging to be optimistic about its entry and focus in it non-core areas.