TBR

T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .

TBR EVENT PERSPECTIVE

Dell applies a newly aggressive,
...
Although the ability to accelerate strategies will aid Dell in the short term, the company wisely views this
power as a co...
“We think that no other company spends as much time listening to customers, and two-thirds of our
commercial conversations...
transformation projects by enabling seamless management and integration of data across public and
private cloud environmen...
©2013 Technology Business Research Inc. This report is based on information made available to the public by the vendor and...
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Dell applies a newly aggressive entrepreneurial spirit to its ongoing solutions strategy

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Dell applies a newly aggressive entrepreneurial spirit to its ongoing solutions strategy

  1. 1. TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C . TBR EVENT PERSPECTIVE Dell applies a newly aggressive, entrepreneurial spirit to its ongoing solutions strategy Dell World 2013 Dec. 11–13, 2013 Austin, Texas Authors: Christian Perry, Senior Analyst (christian.perry@tbri.com) Krista Macomber, Analyst (krista.macomber@tbri.com) Joseph Walent, Analyst (joseph.walent@tbri.com) TBR Perspective With an entrepreneurial startup spirit visible throughout its executive ranks, the newly private Dell showcased at Dell World 2013 plans to use its freedom to make aggressive moves — including investments in R&D, M&A and ventures — to accelerate its solutions strategy. TBR believes privatization will serve Dell well by allowing the firm to quicken its penetration of the enterprise market and expand global presence. Dell’s freedom to alter its strategies and portfolio midstream without Wall Street scrutiny will allow it to more quickly meet rapidly evolving customer demands. Dell seeks to use its strategy to spearhead an evolution of the enterprise market from what it views as best-of-breed systems to fully integrated, software-driven systems. TBR believes Dell’s efforts to lead customer conversations with solutions to business problems, rather than products, accurately reflects the market’s focus on workload requirements. Although CEO Michael Dell stressed his company is “gunning hard at being the top server vendor,” Dell World 2013 had a distinct lack of speeds-and-feeds speak, indicating Dell is methodically riding the software wave to capture customer opportunities.
  2. 2. Although the ability to accelerate strategies will aid Dell in the short term, the company wisely views this power as a conduit to long-term innovation. Dell is challenging its employees to embrace a startup mindset, which, when combined with its freedom from Wall Street scrutiny, creates opportunities for Dell to quickly help customers transform and modernize their environments. Dell will facilitate innovation by investing in research and development, mergers and acquisitions and joint ventures to expand its solutions offerings. Dell’s go-forward strategy, as outlined at Dell World 2013, is embodied in four themes: transform, connect, inform and protect. To demonstrate these themes, Dell made key announcements, explaining the launch of its Enterprise Mobility Management platform; a joint agreement between Dell and Red Hat to co-engineer OpenStack-fueled private cloud solutions; enhancements to Dell’s Connected Security portfolio; the classroom-focused Chromebook 11; and EqualLogic storage arrays that offer “flash at the price of disk.” Dell showcases speed and agility with new enterprise offerings A core pillar of Dell’s ongoing shift to a solutions provider is its ability to identify customer pain points and provide products and long-term solutions that effectively eliminate those issues. As customers continue to integrate service-driven efficiencies into their data centers, vendors are moving quickly to deliver private cloud solutions that mesh well with existing environments. Dell launched a collaboration with Red Hat to engineer enterprise-grade private cloud solutions, making Dell the first OEM for the Red Hat Enterprise Linux OpenStack Platform. Dell also unveiled several enhancements to its storage and networking portfolios, including an EqualLogic PS6210 Series array that offers all-flash, hybrid and all-HDD (hard-disk drive) options. According to Dell, the new array offers “flash at the price of disk,” which TBR believes will help expand the vendor’s midmarket presence as midsize customers increasingly desire large-enterprise-level performance and efficiency. Dell also showcased W-Series Gigabit Wireless Access Points, the market’s first purpose-built 802.11ac enterprise access points, which are up to three times faster than 802.11n access points. TBR believes Dell’s reputation continues to be that of a product-led vendor, but privatization will allow Dell to shed that image more quickly as it drives innovation across its portfolios and adjusts strategies — again, without Wall Street scrutiny — to present products as supporting pieces of its business transformation discussions with customers. Key competitors such as HP and IBM, on the other hand, must still rationalize product and solution introductions back to the overall enterprise strategy throughout the product’s lifetime. If a Dell product flops, Dell can switch gears by extracting successful elements of the product and moving in a different direction or can eliminate the product altogether if it is not meeting customer needs. Dell’s End User Computing strategy spans hardware and software as the company works to bridge consumer and professional worlds www.tbri.com pg. 2
  3. 3. “We think that no other company spends as much time listening to customers, and two-thirds of our commercial conversations start with the PC,” said CEO Dell, encapsulating how critical the End User Computing segment is to the company’s imperative to connect with customers. As today’s workforce demands productivity from any location or device, meeting this imperative increasingly depends on Dell’s ability to mesh devices and software innovation. TBR believes Dell’s focus on device look and feel coupled with streamlined purchase options — such as presenting commonly chosen configurations on Dell.com — is helping to stem PC unit shipped declines. Dell’s focus on balancing security and management of endpoint devices and the user workspace will help the company better leverage the PC to spark broader, solutions-facing conversations through 2015. Dell entered the Chromebook space with the education-specific Chromebook 11, and it will offer in January the Wyse PocketCloud for download with any Dell Chromebook, underscoring the vendor’s focus on accommodating end-user demand for access to data from any device. It also offers centralized, Web-based configuration and tracking, effectively positioning its value proposition of manageability and security as a differentiator in this expanding marketplace. Continued proliferation of “bring your own device” (BYOD) policies in the enterprise will drive customer pain points that Dell can leverage to position as a provider of end-to-end solutions spanning from the endpoint through the data center. TBR believes Dell is working to deliver flexibility, simplicity and security to SMB IT departments, which are struggling to accommodate increasingly mobile workforces. Dell views this opportunity as significant, evidenced by Dell’s assertion that 45% of organizations will be “BYOD-only” by 2020. TBR believes Dell is well positioned to capitalize on this demand with its Enterprise Mobility Management (EMM) and Dropbox for Business Solutions, announced at Dell World. Dell’s EMM solution delivers unified mobile device, application and content management alongside a Secure Remote Access gateway (SonicWALL/SRA). Dropbox for Business integrates Dell’s data protection capabilities to help users access data securely from any device. Although nascent, Dell Software is critical to Dell’s growth TBR believes Dell will increasingly lead with Dell Software systems management and security software capabilities to differentiate core server and PC offerings in 2014. As IT has an increasing impact on the profitability of businesses, these capabilities will become core to how Dell helps customers reduce costs and improve business outcomes. In its first year as a separate entity, Dell Software focused on portfolio integration. TBR believes this effort will be eased as Dell aggressively invests in R&D, helping the company better rationalize Dell’s software pieces across the rest of the company. Successful integration of Dell Software will be a strategic priority for Dell, as Dell Software provides the remaining capabilities that Dell needs to provide end-to-end solutions and has large enterprise credibility that Dell will leverage to expand upstream. Dell Software also will help Dell expand throughout 2020 in areas critical to Dell’s overall enterprise business, such as cloud and big data. The Enstratius acquisition forms the basis of Dell’s cloud management solution, which will help Dell meet its imperative of supporting customers in their IT www.tbri.com pg. 3
  4. 4. transformation projects by enabling seamless management and integration of data across public and private cloud environments. Additionally, helping customers get more value out of their data stores is a corporate focus for Dell. TBR sees opportunity over the next 12 months for Dell to sell analytics solutions, such as its Toad Business Intelligence Suite, to customers in industries where it has hardware traction, such as education. Dell will increasingly bring services into the spotlight to support corporate solutions market share and revenue growth initiatives Dell’s transformation to a solutions provider partly hinges on the vendor’s ability to create wider exposure for the Dell Services business and its capabilities. Increasing awareness around those capabilities will create conditions for Dell Services to gain traction and provide a steady revenue growth engine for the company as a whole. Michael Dell and Dell Services President Suresh Vaswani emphasized the importance of the healthcare IT services business and its significant role in Dell’s overall services strategy going forward. Dell Services’ focus on the midmarket and smaller large enterprise customers in the healthcare arena resonates with Dell’s legacy work. Dell Services’ Healthcare unit will continue to focus on helping healthcare provider clients make better use of digitized data and guiding healthcare payer clients as they shift to a consumer-oriented approach to healthcare benefits. Consolidation in the industry presents additional opportunities for Dell Services, as providers take advantage of economies of scale as the shift to outcome-based compensation supersedes volume-based remuneration models. TBR believes much of Dell Services’ growth in 2014 will stem from the healthcare vertical, with opportunities to expand service delivery internationally aiding in geographic revenue stream diversification. Business unit leaders within Dell Services announced a strategic partnership with Accenture. The move provides Dell with immediate access to higher-level conversations around business and IT strategy without needing to build a cadre of consultants and a unique reputation. Dell Services will provide deep product and solution expertise for the implementation of those solutions it assists Accenture in designing. The alliance also will give Dell Services immediate opportunities to scale up its expertise pools outside its traditional wheelhouses of healthcare, education, BFSI and government, with a leg up to expand into vertical-specific solutions delivery to manufacturing, retail, hospitality and hightech/communications. Dell Services will complement its access to Accenture’s expertise with niche acquisitions of subregional C&SI practices to augment its local presence in target regions in the U.S and internationally. Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com. www.tbri.com pg. 4
  5. 5. ©2013 Technology Business Research Inc. This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce. www.tbri.com pg. 5

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