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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 .                         ...
TBRTBR believes Dell’s solutions strategy follows a tightly defined path designed to capitalize on the growingneed for eff...
TBRfrom competitors. TBR believes that at a time when hardware speeds and feeds look similar acrossvendor product lines, D...
TBRWhile Dell’s focus on repositioning itself as a solutions provider is clear, the company still has muchwork to do in tr...
TBRmarketing officer; Brad Anderson, president, Enterprise Solutions; Jeffrey Clarke, vice chairman andpresident, Global O...
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Tbr event perspective_daac_2012


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  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 is solving business pains with a solutions-led strategy that leverages technology and services Dell Annual Analyst Conference Austin, Texas April 24-25, 2012 Authors: Christian Perry (, Senior Analyst, Computing Practice John Spooner, Director, Computing Practice Stuart Williams, Director, Software Practice Lindy Hanson, Director, Professional Services PracticeTBR PerspectiveDell continues to pursue corporate goals by building business solutions for IT and the end user,evidenced by its profit expansion, customer testimonials, and the strong, targeted messages deliveredby executives and customers at the 2012 Dell Annual Analyst Conference. Viewing the world in terms ofcustomer value associations rather than point products such as PCs, Dell is focused on solving customerpains, and proves that focus through testimonials. With services and solutions now accounting for 30%of Dell’s revenue, the company is on track to become the end-to-end solutions provider it strives to bewith its spate of acquisitions and its recent launch of a software group.Although Dell’s focus no longer falls on point products, technology remains a significant part of itstransformation. With the need for simplicity and consolidation driving datacenter convergence, Dell ishelping customers more easily deploy and manage servers, storage, and networking. Along similar lines,Dell’s consumer strategy targets business end users first, who fill both personal and professional rolesfrom a technology perspective.
  2. 2. TBRTBR believes Dell’s solutions strategy follows a tightly defined path designed to capitalize on the growingneed for efficiency and converged products in mature companies as well as on growing IT optimism inemerging markets. Dell customers lined the conference stage to relay the results they’re achieving withDell’s solutions, providing evidence that the company is delivering on the promise it made in 2011; atthe 2011 Dell Annual Analyst Conference, the company highlighted the importance of being a solutionsplayer and building for midmarket – and scaling up or down as necessary. Dell is following through withthat plan, as shown by the converged server/storage solutions showcased in the 2012 event as well asofferings such as the XPS 13 Ultrabook, which delivers a strong enterprise value proposition whencombined with services such as Dell’s ProSupport.The U.S. now accounts for less than half of Dell’s revenue, according to Chief Financial Officer and SeniorVice President Brian Gladden, while its revenue continues to increase at impressive rates in growthcountries as well as in countries with down economies, such as those in EMEA. Dell also is aggressive onthe M&A and R&D fronts, investing in intellectual solutions, building new solutions centers, andlaunching a new business architecture team that helps it stay in tune with the enterprise market. Effortsto greatly expand its engineering resources also reflect Dell’s desire to be at the forefront of IT trendsthat help customers solve their business problems.We also see Dell continuing its dedication to the SMB market, particularly as an increased number ofthese organizations set up global footprints. Dell technologies initially aimed at SMB customers, such asKACE appliances, are scaling upward as larger enterprises look to escape the burdens of more extensive,complex platforms.Impact and OpportunitiesCustomer requirements and emerging markets serve as continuing sources of fuel for Dell’sinnovationDell will pursue growth via solutions, with servers, storage, networking and software; its ultimate goal isstreamlining and simplifying IT to allow customers to focus on their business. Dell recognizes thegrowing customer needs around simplification and time to value, which are helping to mold thecompany’s overall solutions approach. As noted by Dave Johnson, Dell’s senior vice president forcorporate strategy, listening to customers is a key strategy that helps drive innovation. Dell reads morethan 30,000 tweets per day and innovates on that information, similar to how it innovates based on itscrowd-sourcing efforts in IdeaStorm, Dell’s idea-generating website that’s open to the public. Costreduction remains a critical goal for CIOs, and Dell is working to provide solutions that help CIOs improvethe production and efficiency of their businesses.In 2H12, Dell will leverage its strong brand recognition in emerging countries, where consumerization isopening opportunities for business technology penetration. These same countries are moving directly tonew technologies instead of lingering with legacy products, which lends itself well to Dell’s focus oninnovative, easy-to-use solutions that can provide better ROI than more expensive, complex products
  3. 3. TBRfrom competitors. TBR believes that at a time when hardware speeds and feeds look similar acrossvendor product lines, Dell’s message of meeting business needs will resonate with customers seekingvalue and speed to problem resolution.Simplicity drives the growing focus on datacenter convergenceConvergence is a burgeoning datacenter focus among Dell’s competitors, including IBM and Cisco. TBRsees Dell funneling more R&D resources into integrated solutions that encompass servers, storage andnetworking, allowing customers to create simplified environments that require less administration andmanpower. Dell also brings software into the mix to ensure its integrated systems includecomprehensive, yet streamlined, management solutions. This complete convergence aims to makedatacenter hardware more dense, more power efficient, and easier to use.Brad Anderson, president of enterprise solutions, said the market is no longer interested in loads offeatures, and TBR believes that message accurately reflects the datacenter market’s move towardsimplicity. Data – and its management – also was a prime topic at Dell’s event. TTI, or time to insight, is aclever take on the growing need to extract value from big data, or what Dell terms “big insights.” Asvendors take x86 architecture to the peak of its abilities, customers are in a better position to takeadvantage of big data through purpose-built appliances, which Dell noted will become a liability if itcannot be mined.The addition of a software division led by seasoned executive John Swainson is evidence of Dell’stransformation. TBR expects Dell to undertake more M&A activity as it rapidly builds out its softwareportfolio; security, systems management, integration, and cloud-based offerings are likely areas ofinvestment. The company also will expand its management team and focus on midmarket softwaredesigns that address customer concerns around complexity and cost.Cloud and security represent prime go-to-market opportunitiesDell Services is leveraging enhanced cloud and security capabilities to tap into client demand foroperational efficiency and maximizing IT effectiveness, cross-selling value-add solutions on top of itsestablished hardware support service offerings to establish services as a key driver of corporate top- andbottom-line expansion.Dell Services will effectively capitalize on what it has identified as a $44 billion opportunity in the cloudmarket by 2014 by expanding its global delivery capabilities, including datacenters, and consultingofferings, such as ProSupport. Dell will cultivate a message of improved ROI by leveraging consulting toeffectively tailor its cloud infrastructure solutions to customers’ specific needs. As changing deliverymodels such as cloud yield increasingly complex threats to the IT environment, Dell is bringing this“needs-based” approach to security, as evidenced by its SecureWorks buy, which enhances Dell’s abilityto manage security, deploy counter-threat unit intelligence, and provide security and risk consulting.
  4. 4. TBRWhile Dell’s focus on repositioning itself as a solutions provider is clear, the company still has muchwork to do in transitioning its model. Services and software are two core elements of any solutions-ledstrategy and a key area where vendors can differentiate. Vendors such as IBM and Accenture leveragehigh-value services and/or software portfolios that integrate IT services and management consulting toaddress customers’ pain points across not only the IT functions but also business functions. Verticalexpertise is also an area where leading professional services organizations differentiate themselves.However, Dell Services is making inroads in shifting its services model. Applications and BPO services arehigh priority in terms of management attention and investment, with the buildout of an applications-focused sales engine and strategic acquisitions, such as Make and Clerity. Within its applications andBPO practice, Dell Services also built vertical expertise in healthcare, financial services and itscommercial segment (including manufacturing, retail, logistics and transportation), but much work andinvestment remains for Dell to reach the scale and breadth of solutions offered by competitors such asAccenture and IBM.The other key area of investment for Dell Services will be driving awareness of its services capabilities.Dell Services targets high-demand business areas such as cloud, mobility, social media and applicationsmodernization; however, the perception of Dell Services in the market is still focused on its historicalstrengths around infrastructure and infrastructure-related support and consulting. Ensuring customersare aware of its capabilities, particularly around applications and BPO, will drive continued expansion ofthe Dell Services footprint, especially in the SMB market, where Dell has a unique opportunity to attractcustomers that typically aren’t served directly by the larger professional services organizations.Evolving PC strategy mirrors the changing requirements of the modern customerDell’s intent on becoming an end-to-end solutions provider would not be complete without the PC.However, the company no longer segregates consumers from business users, as the line between thetwo is now heavily blurred. This tactic accommodates today’s average device users, who need mobiledevices that bridge the gap between work and personal life. Products such as the Dell XPS 13 Ultrabook,complete with a very thin profile and a carbon-fiber base, echo these merging market requirements.Dell will continue to change the look and feel of its product portfolio along these lines.TBR believes Dell is well-positioned to take advantage of the coming Windows 8 release, which shouldchange the shape of business, computing with devices that satisfy both desktop and mobile needs. Dellrecognizes the opportunity to create tablets that effectively integrate with business environments andcomplement existing technologies. Dell will design phones and tablets with a services-led approach thatintegrates technologies such as MDM (mobile device management). With simpler management andbetter security, these mobile devices will prove vital to supporting enterprise clients.Event OverviewTBR attended the 2012 Dell Annual Industry Analyst Conference in Austin, Texas, on April 24-25, wherekey Dell executives, including Michael Dell, CEO; Karen Quintos, senior vice president and chief
  5. 5. TBRmarketing officer; Brad Anderson, president, Enterprise Solutions; Jeffrey Clarke, vice chairman andpresident, Global Operations and End User Computing Solutions; Steve Schuckenbrock, president,Services; Steve Felice, president and chief commercial officer; Brian Gladden, chief financial officer andsenior vice president; David Johnson, senior vice president, Corporate Strategy, outlined key strategiesof Dell’s continuing transformation into an end-to-end solutions provider. During the conference,executives discussed the company’s focus on portfolio technologies that help IT customers be on “thefront end of strategy.”Technology Business Research, Inc. is a leading independent technology market research and consulting firmspecializing in the business and financial analyses of hardware, software, networking equipment, wireless, portaland professional services vendors. Serving a global clientele, TBR provides timely and accurate market research andbusiness intelligence in a format that is uniquely tailored to clients’ needs. TBR analysts are available to furtheraddress 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©2012 Technology Business Research Inc. This report is based on information made available to the public by the vendor and other publicsources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable orresponsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is notand 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 TechnologyBusiness Research, Inc. for permission to reproduce.