This is the second post in a two-part blog series discussing Dell’s strategy to help SMBs better capitalize on technology. The first, A New Cloud Formation: Dell Cloud Marketplace, provides perspectives from Dell World 2014. This second post, which is excerpted from SMB Group’s April 2014 report, Guiding Stars: Vendor Strategies to Bring Game-Changing Technology Trends to SMBs, offers additional insights into Dell’s approach to help SMBs capitalize on technology trends.
The writing is on the wall for any business: With customers and prospects racing into the digital, mobile, and social future at breakneck speed, SMBs must proactively deploy technology to improve both business processes and the customer experience. SMBs that figure out how to use technology to stay ahead of their customers’ demands will thrive, while those that don’t face extinction.
But there are lots of vendors and solutions out there ready to help you on your journey, and one-size-fit all doesn’t apply in SMB. Is Dell a good fit for you? Read on for information and insights to help you decide.
Dell’s Strategy to Bring Game Changing Technologies to SMBs
Dell sees cloud, mobile, social, analytics and other technologies converging towards the next pivotal tipping point, where IT will change the lives and experiences of nearly every industry, country and person on the planet.
Dell articulates its view on top technology trends somewhat differently than other vendors interviewed for this report. However, the same technology trends—cloud, analytics, social, mobile and security—are core to Dell’s top picks. Dell sees the following trends ushering in new wave of business transformation, similar or greater in scope to how the Internet and web affected businesses:
- People will increasingly rely on technology to connect, collaborate and accomplish tasks and goals. Embedded in user-friendly solutions, cloud, social and mobile technologies enable SMBs to connect, collaborate and engage anytime, anywhere to better serve their customers and to work more efficiently.
- IT is changing from a support function to becoming core most business operations, and business decision-makers are increasingly involved in IT decisions to ensure the business gets the value it needs from IT.
- Amidst the growing volumes of structured unstructured data, SMBs that have the rights tools to find the needles in the haystack and uncover useful, actionable information and insights will gain competitive and market advantages.
- As SMBs rely more on technology to run their businesses and engage with customers, partners, suppliers and others, taking measures to secure and protect data, information and access are increasingly essential to business viability.
Some of the tangible ways that Dell is helping SMBs capitalize on these changes include:
- Becoming an über-cloud provider: Dell has been steadily expanding the Dell Cloud Partner Program to provide access and end-to-end support for offerings from multiple cloud vendors.
- Offering open, private-cloud solutions, which should help give SMBs more confidence in using OpenStack as an alternative to proprietary IaaS and PaaS (infrastructure and platform as-a-service) alternatives.
- Expanding portfolio of mobile management solutions, such as Enterprise Mobility Management, a unified mobile management solution to managed devices, apps, and content, and Secure Remote Access Gateway to protect endpoints.
- New intellectual property gained from acquisitions such as SonicWALL, Quest, Boomi, Compellent and Force10 is skewed towards the SMB world. In fact, Dell views SMB and midmarket as an ideal focal point for development and acquisitions since it believes large organizations also want scalable solutions that are easier to deploy and use too.
Changes in SMB Technology Expectations and Behavior
Fueled by the web, mobile and social access, Dell sees changes in how SMBs evaluate and shop for solutions. Today, SMBs are more prone to have done their homework before they come to the sales table. Armed with a greater understanding upfront, they are looking for vendors and partners that will listen to what they are trying to do and offer authentic, objective and knowledgeable guidance. In addition, Dell believes that simply doing the right things for people works. To that end, Dell prefers having its customers tell its story rather than Dell telling it. For example, Dell cites the tornado damage in Oklahoma City last spring, where Dell served as a first responder, as exemplifying its commitment to doing the right thing to earn customers’ faith in Dell.
Dell sees both the role of SMB IT and business decision-makers morphing. More frequently, line-of-business (LoB) managers are not only customers of IT departments, but also co-owners of IT. This means that IT staff must work harder to meet increasing demands, and become more educated and engaged in business operations and strategy than in the past. SMB IT personnel need more practical and actionable advice and support from vendors and their channel partners to juggle ongoing IT management with innovation.
SMBs are also scrutinizing “calculated risks” much more carefully. For instance, SMBs are interested in the cloud because of affordability and ease of access/use advantages, but want to ensure that cloud solutions are secure and reliable. SMBs are also more likely to factor business disruption into the cost/benefit analysis for any given solution. They are getting wiser about the perils of bad decisions and implementations, so the bar keeps getting higher to deliver solutions with less business disruption and faster time to value.
Finally, SMBs increasingly recognize that the technology-performance connection is real, and can be used to accelerate growth disrupt industry icons with innovation and agility. The perspective is summed up in Dell’s latest ad campaign. SMBs can use new technologies not only to reshape their existing businesses, but also to redefine the economics of an industry and expectation of the market.
However, one constant remains. Most SMBs need capitalize on these opportunities without putting themselves in financial or operational jeopardy. SMB budgets, IT staff and expertise aren’t often able to both maintain what they have and innovate within the window of opportunity. So Dell is focusing on designing, delivering, supporting and financing solutions that take these constraints into account.
Perspective: Dell as SMB Technology Catalyst
Dell’s journey to transform itself has been in progress for a few years. While on Wall Street’s watch, it wasn’t easy for Dell to recast its image from a transaction-oriented hardware company to an end-to-end solutions provider and trusted advisor.
However, Dell’s entrepreneurial heritage is once again alive and well. Michael Dell not only started the company in his dorm room when he was a 19-year old student at the University of Texas, but took it private in 2013 to gain control over its destiny again. With genuine DNA at the heart of Dell’s commitment to SMBs and entrepreneurs, Dell can take a longer-term view on return on investment in new technologies. This should enable it to launch more innovative and affordable cloud computing, mobile, social, analytics and security technologies geared to SMB requirements.
In addition, Dell prides itself on listening to its customers and creating a mutually beneficial dialogue. Dell’s Social Media Command Center is one of the best in the industry, and Dell’s SMB and partner outreach programs are extensive.
While Dell is still in the midst of its own transformation journey, its attitudes and actions when it comes to SMBs should help it to significantly broaden its status as a trusted advisor in this market.
This is part one of a two-part blog series discussing Dell’s strategy to help SMBs better capitalize on technology. This first post provides perspectives from Dell World 2014. The second post, Dell’s Strategy to Provide Game Changing Technologies to SMBs, provides a detailed glimpse into Dell’s approach in the SMB market.
How has Dell changed since Michael Dell took Dell private a year ago? A couple of weeks ago, I had the opportunity to attend Dell World 2014 in Austin and find out. As I’ve written in past posts about prior Dell Worlds, the transformation has been underway for several years, since Michael Dell embarked on his strategy to transition Dell from a hardware-centric company to an end-to-end solutions provider.
As a private company, Dell is no longer obliged to disclose financial metrics. But, unleashed from Wall Street’s quarterly pressures, Dell appears to be making excellent progress on its goals. For instance, Dell has broadened its software and service portfolios, and claims significant growth in both areas. According to IDC, Dell is also increasing hardware market share no doubt aided in part by competitors HP and IBM. With IBM exiting the x86 server market, and HP’s recent decision to split itself into two companies (one focused on PCs and printers, the other on servers, software and services) Dell is the only vendor left that supplies an end-to-end desktop to data center portfolio. Meanwhile, Dell has evolved to become a significant force in the channel, with 40% of its sales now going through channel partners.
Dell’s New Cloud Marketplace
One of the most interesting announcements at the event was the beta launch of the Dell Cloud Marketplace, which distinguishes itself from many other cloud vendors by offering customers choice. In Dell’s brokerage model, the vendor provides customers with a one-stop shop from which they can select and manage cloud services from multiple vendors, including Amazon, Google, Joyent and Microsoft. The marketplace is built on technologies from Dell’s Cloud Manager, which Dell acquired from Enstratius in 2013. Key technology partners include Delphix, which supplies data migration services; Pertino, for cloud networking; and Docker, for container and portability services. Dell is also partnering with Foglight to provide developers with tools to improve cloud-based application performance.
Dell Cloud Marketplace is tuned to the different needs of IT managers and developers. IT managers get a single console from which they can provision, manage and integrate private, public and hybrid could services. Meanwhile, developers can get instant, self-service access to cloud services. The concept appealed to conference attendees, with over 400 signing up for the beta the day Dell announced it.
Dell’s vision for its Cloud Marketplace is similar to that of Priceline or Kayak in the travel business. Dell will aggregate, simplify and streamline shopping, selection, purchase and management across many cloud service options. Cloud offerings will initially be sold through Dell.com, Dell’s established, high volume direct sales channel. Over time, Dell is likely to implement reseller programs and possibly even white-label programs for channel partners.
Perception is the hardest thing to change. With deep, successful roots in the hardware business, they company has been primarily regarded as a hardware vendor, even though its journey to become an end-to-end solutions provider has been underway for quite a while.
Dell’s move to become a broker of cloud services, highlight the acquisitions, research, development and determination that Dell has been investing in this quest. And, with cloud adoption now mainstream (Figure 1), Dell’s timing for the marketplace is on target as well. The cloud makes it easy for people to buy new services, and more difficult for IT to manage the wide variety of different services that are in play. Providing a solution that gives IT managers more visibility and governance capabilities, while at the same time offering users more choice, promises to help address this challenge.
Figure 1: SMB Cloud Adoption
Source: SMB Group
However, due in part to the uniqueness of the model, Dell will need to invest in market education to articulate the capabilities and benefits of this new brokerage approach more clearly.
In addition, Dell must create a clear roadmap for what and when it will add to the marketplace to properly set market expectations. For instance, one of the customers I spoke to at the beta would like to use the marketplace to help him manage the wide range of file sharing and collaboration solutions that his users are buying.
Finally with Dell partners accounting for an increasing percentage of Dell sales, Dell will need to come up with an attractive approach to lure partners to resell Dell Cloud Marketplace services.
Disclosure: Dell paid for most of my travel expenses to attend Dell World.
Laurie: Hi Mark, and thanks for taking time to provide some color commentary on Dell World. As usual, my focus is on small and medium businesses, so can you preview for me what Dell will be doing at Dell World this year that is geared toward SMB customers?
Mark: Just like we purpose-design solutions for SMB customers, Dell World features speakers, sessions, solution showcases, and networking opportunities for SMBs. Two of my favorite things for SMBs are the User Forum, where customers can deepen their technical knowledge around Dell solutions, and keynote speaker Alexis Ohanian, a New York based entrepreneur who founded Reddit.
Laurie: Why would SMB customers and prospects attend Dell World?
Mark: It’s a world-class event and opportunity to network with and learn from not only other SMB customers but other types of organizations from around the world. The diverse perspectives are invaluable. For customers who rely on technology to grow their business, whether they’re Dell customers already or not, it’s a great way to learn about where Dell is going and how that helps customers achieve their goals.
Dell also recently commissioned an extensive research study that explores how respondents adopt, consume, use and influence technology in four key areas – mobility, security, cloud and big data. The research focuses on mid-sized organizations (100 to 5,000 employees) across the globe), and we’ll be sharing and reacting to the results in numerous sessions at Dell World.
Laurie: How many SMB customers do you expect to attend? Do you have any SMB customers being showcased at the event (Executive Track, Partner Summit, Main Track and/or Ancillary events)?
Mark: We expect over 600 SMB customers joining us for Dell World 2014. SMB customers will participate in all of the Dell World tracks: Executive Summit, Partner Summit, User Forum, and more.
Laurie: What particular SMB solutions is Dell showcasing at the event? Addressing which SMB customer problem areas?
Mark: We’ll be showcasing many of our solutions; ones that I think are of particular interest for SMBs include our SonicWALL network security appliances and management consoles that provide industry leading software-designed protection for facilities of all sizes from small branches to massive data centers; our 13G servers and new SC4020 storage array will also be prominent. Systems like these help customers increase performance, reduce their IT footprint, and maximize the value IT can drive for their business.
Laurie: Are there any ‘birds of a feather’ or interactive sessions specifically for SMB customers at the event?
Mark: Absolutely. My team and I will be hosting a reception on Wednesday evening at Cedar Street Courtyard in Austin for SMB customers, channel partners, and Dell leaders in the space. Any SMB customer registering for Dell World should ask their account team for an invite to the reception.
Laurie: I understand that the Solutions Expo is a bit different this year and geared more around starting with a customer’s problem, then taking that customer down a specific path to a solution. What kind of path would an SMB customer take for the following problem areas at the show:
Mark: It is a bit different this year. It will help customers self-select the most relevant content for them including:
- Mobility/mobile workforce Connect Journey to Evolving Workforce
- Security Protect Journey to Security Deep Dive
- Cloud Transform Journey to Cloud Deep Dive
- Big data Inform Journey to Big Data Deep Dive
Other Deep Dive areas include: Services, Software, Internet of Things and Data Center.
Laurie: What makes Dell a good choice for SMBs?
Mark: Dell’s ability to provide industry leading and cost-effective solutions from the endpoint to the data center to the cloud that address key needs for productivity, security, data protection, and analytics is world-class. We architect and deploy these systems for SMBs through a dedicated model for sales and support from both our direct sales teams and our channel partners.
Laurie: Mark, thanks so much for the sneak preview, and see you at Dell World.
Disclosure: This post was sponsored by Dell.
From November 4-6, Dell will host roughly 5,000 customer, partner and influencer attendees at its fourth annual Dell World conference in its hometown of Austin, Texas, and up to 10,000 attendees will tune in live online.
For those who are unfamiliar with it, Dell World is Dell’s premier annual customer and partner event. Having found the three prior Dell World events I attended to be both informative and fun, I was eager to find out what’s on tap for this year’s event. So I was delighted to get a sneak preview from Jeanne Trogan, Dell’s Executive Director of Global Events, about what Dell World will offer.
With time arguably being our most valuable asset, here’s my take on why you’d want to take 3 days out of your busy schedule to attend Dell World based on this preview.
- Gain a clearer understanding of how technology can help solve business problems and meet business goals.
Companies want to harness technology for better business outcomes, but it’s often hard to figure out how to do this. According to SMB Group’s 2014 SMB Routes to Market Study, small and medium businesses (SMBs) increasingly view technology as a means to automate operations and work more efficiently, and as a vital tool for creating and sustaining a vibrant, growing business (Figure 1). But the same study also shows that figuring out how different technology solutions can help their businesses is a top challenge for many SMBs.
Figure 1: SMB Technology Perspectives
With this in mind, Dell World will provide customers–from SMB to large enterprises–with high-level advice and expertise to help them understand how and why key technology trends are reshaping business and consumer practices and behaviors. Keynote speakers, including Dell CEO Michael Dell and other tech and business innovators from business and academia will put cloud, mobile, analytics, security, the Internet of Things (IoT) and other trends into sharper focus, and help attendees stay ahead of the technology curve.
- Learn how to turn strategy into reality.
Refreshing your technology strategy and direction is the critical first step, but then you have to figure out how to execute. In fact, figuring out cost-effective ways to implement and/or upgrade solutions and to keep them up and running are also daunting challenges for SMBs (Figure 2).
Figure 2: SMB Technology Challenges
Dell World is chock full of interactive sessions as well as hands-on labs and demos to help attendees kick the tires on new solutions, and fulfill the new technology requirements that their businesses require. Attendees can choose from more than 70 breakout sessions for a deeper dive into how to make technology work for the business. For instance session topics range from how to conquer cloud chaos to how to maximize mobility benefits without compromising security, and labs address areas such as big data and analytics, desktop virtualization, and streamlining IT management.
In the Solutions Expo, attendees can get an up close and personal look at the latest solutions. This year, Dell is reorienting the Solutions Expo from a Dell product-centric approach to a customer-centric problem and solution approach. The floor will feature different paths that start with technology problem areas, and guide customers toward relevant solutions and information. I think Dell’s refreshed approach to the Expo floor and demonstrations will be something that customer attendees will appreciate.
- Learn outside the classroom.
Just like when you were in school, sometimes the most important learning you do takes place outside of the classroom. Networking is a key part of Dell World with other attendees for fresh perspectives, exchange information and compare notes, not just at the event, but over the longer term. In addition to the serendipitous meetups that will happen spontaneously throughout Dell World, Dell is also scheduling meetings, such as an Executive Summit for CIOs, to facilitate peer-to-peer interaction.
- Enjoy Austin.
If you’ve been there, you know what I’m talking about! If you haven’t been there, you’re in for an amazing experience. In fact, Dell keeps asking attendees where they want to have Dell World, and people want to come back. Austin has something for everyone, whether you love music, great food or the great outdoors. For starters, Dell World will feature both Weezer and Duran Duran in concert–something for everyone from millennials to baby boomers. Get some fresh air with a walk or run around Town Lake, and grab a bite or drink at the Hula Hut as a reward. At night, check out the live music and gourmet food trucks on Rainey Street, or at Austin City Limits. And don’t forget to check out the nightly bat migration under the Congress Street Bridge. Last but not least, there’s the history–Dell was born in Austin in Michael Dell’s University of Texas dorm room. Since then, Austin has grown as a tech mecca.
Dell World also marks the one-year anniversary since founder Michael Dell won an extended battle to take the company private. In a recent CNBC interview, he expressed how liberating its been to off the Wall Street treadmill and able to focus on customers, and invest more time, R&D and energy on their behalf. I have a feeling that attendees will probably pick up on how this more positive energy is coming to fruition at Dell World as well.
Last week, I had the opportunity to join Dell’s 1-5-10 security panel discussion. This was the first in a series of small group events hosted by Dell to consider security trends and implications over the next one, five and ten years. Session attendees included Dell security experts, customers, partners, press and analysts. We discussed what small and medium businesses (SMBs) should be thinking about as they prepare for the future, and what vendors need to do to help them more easily secure their businesses.
Verna Grace Chao, director, Dell global security solutions, kicked off the session by asking us for our favorite security terms. The sheer magnitude of cyber-security issues and risks quickly bubbled up as people reeled off terms such as honeypot, snort, worms, hijack, Trojan, trampoline, phishing and ransomwear and more. I couldn’t help but think how difficult it is for business decision-makers to understand what all these terms mean, let alone stay ahead of threats and safeguard corporate information.
Of course, this challenge is even more daunting for small and medium businesses (SMBs) that lack internal expertise in this area. SMB Group research indicates that on average, only 19% of businesses with less than 100 employees have full-time, dedicated IT staff, and 27% have “no IT support” at all. Meanwhile, although 86% of medium businesses have dedicated IT staff, these resources are likely to be IT generalists, not security experts. As Michael Gray, Director, Thrive Networks, an IT solutions provider owned by Staples said, “there aren’t chief security officers in SMB.” So, despite mounting security risks and their increased reliance on the Internet and technology to run their businesses, many SMBs are under-prepared to deal with today’s threats, let alone those that the Internet of things (IoT) will usher in tomorrow.
Security Steps To Take Today
For many SMBs, the first step is to become more security aware. The Internet, mobile, cloud, social and other technologies provide many great business benefits. But they also open the door to more vulnerabilities. Too often, digital convenience trumps security, and SMBs choose not to see themselves as potential cyber-targets. Even worse, ITIC survey data shows 35% of firms don’t know if or when BYOD mobile devices have been hacked! Obviously, if you don’t know you have a problem, you can’t fix it.
According to ITIC, hacking is the #1 type of breach, representing more than 25% of all breaches recorded in 2013. Sub-contractor (14%), mobile (13%), insider malfeasance (12%) and employee error (9%) followed. In all, these breached exposed a whopping 91,978,932 records.
Without strong security measures in place, many SMBs are easy targets for hackers. And, because SMBs are often digitally connected to larger business partners, they are increasingly attractive targets. Hackers can potentially not only gain entrée to the SMB’s data, but also gain access to data of the SMB’s bigger partners.
Panelists agreed that if you haven’t yet done so, now is the time to conduct a security audit to determine what potential vulnerabilities pose the biggest financial and brand threats to the business. A solid plan incorporates both measures to prevent breaches from occurring in the first place, and those to detect, prevent and respond to incidents when they do occur.
Business owners and stakeholders need to take a more active role in this process, as Brett Hansen, executive director, Dell Client Solutions Software, explained. The security discussion needs to move from being a tech-only discussion to one where business stakeholders help identify, quantify and prioritize critical business vulnerabilities.
Since SMBs often lack the internal resources required to plan and implement the right level of security, they are increasingly turning to managed service providers (MSPs) for security expertise. A good MSP can help you get a better handle on what vulnerabilities could trigger disruptions, what the impact would be on the business, and develop a risk management plan that aligns with your business requirements and budgets. MSPs can help make security a solvable challenge instead of mind-boggling, unsolvable one. While you can’t eliminate every risk, you can close off the biggest vulnerabilities for your business—and gain peace of mind. Some of the basic measures to take include data encryption; data containerization for BYOD devices (meaning that personal and corporate data are securely separated); and securing the perimeter from unauthorized access.
Trends such as wearables, smart homes and smart cars are exciting and offer many benefits to businesses. But, they will also unleash new security vulnerabilities, especially as more devices and information become interconnected. Jon Ramsey, Dell fellow and CTO, Dell SecureWorks, commented that as cyber and physical domains continue to merge, the risk equation also changes substantially, and will require an expansion of single sign-on to help safeguard all aspects of our digital lives. Participants agreed that these trends will require a shift in the security mindset. Some of the changes forecast include that security solutions will:
- Move beyond protecting data where it resides, to protecting data dynamically, wherever it goes.
- Proactively account for the “human factor.” As security issues increase and become more diverse and complex, they need to become more contextual to make it easier for us humans to do the right thing. Biometrics, from eyeball to touch to even genome identification were mentioned as possibilities in this area. As Patrick Sweeney, executive director, Dell SonicWALL mentioned, security solutions should act more like more like an airbag than a seatbelt.
- Become more adaptive, with capabilities to generate new defenses proactively as new threats emerge. According to Ramsey, “Every threat starts out as an unknown threat, we need to expose it and make it known to defend against it.” Risk analysis risk analysis engines will need to look further beyond individual events to act more proactively to accomplish this.
The good news is that in the future, security solutions are likely to be more adaptive, less dependent on humans to make them work, and more capable of proactively eliminating threats. However, far too many SMBs are falling short even when it comes to many security basics—such as encryption, containerization and perimeter security—leaving them far too susceptible to negative business consequences.
Cyber-security threats may seem endless, insurmountable and even unlikely to many SMB decision-makers. But this session underscored that while we can never eliminate all possible breaches, SMBs should be seeking out the solutions and expertise they need now to get the basics in place for today and to help them prepare for tomorrow.
A couple of weeks ago, I had the opportunity to go to Dell’s annual analyst conference (DAAC), an event I’ve attended for many years. The big difference this year, of course, is that this is the first DAAC since Michael Dell took his now 30-year old company private several months ago.
As a longtime Dell watcher, I’ve been tracking Dell’s journey from hardware vendor to become an end-to-end IT solutions and services provider (see my 2011, 2012 and 2013 perspectives). The event persuaded me that Dell is well on its way to accomplishing its mission to reinvent itself and offer customers a differentiated, more cost-effective and easier-to-use IT experience.
Why? Because Michael Dell has not only unchained his company from Wall Street’s myopic quarterly demands, but because he is also building a powerful value proposition for customers that puts Dell on a solid comeback trail. Key evidence for Dell being on the right track include:
1. Customers increasingly view Dell as a key partner. Dell’s mission to engage in deeper conversations with customers of all sizes is paying off. At DAAC, customers used superlatives to describe how Dell is delivering more complete solutions, higher value, lower costs, and a better customer experience. For instance, Ted Colbert, Boeing CIO, discussed how the Dell relationship has expanded from day-to-day operations to some of the most strategic initiatives. He also described working with Dell as “purposeful,” in contrast to a more scatter shot approach of “just throwing hardware at us like some other vendors.” Exasol CEO Aaron Auld talked about how Dell “provided them with the support they needed to win new business and grow,” and Jenkon Director of Information Systems, Steve Shinsel described Dell’s end-to-end solutions support as “phenomenal.” Yes, I know vendors handpick customers to attend these events, but in addition to the unprecedented level of enthusiasm I heard from these customers, Dell’s aggregate NPS (Net Promoter Score) of 52 and 90% customer retention are best in class.
2. Business is growing. Since going private, Dell says it has added 18,000 new customers to its ranks and is seeing steady growth in it’s software and services businesses, among others. In fact, the company’s PC business has enjoyed five consecutive quarters of market share growth. I think customers were naturally anxious as they waited to see how things would play out, but are now giving Dell a vote of confidence with their wallets. Furthermore, the company appears to be headed toward profitable growth, according to CFO Tom Sweet, who told us the company paid down $1 billion of debt in the first quarter of this year. Dell’s goal is to get back to “investment grade” status within the next four years.
3. Entrepreneurial DNA runs deep and can now fully surface. Check out Michael Dell’s twitter handle! He knows what it takes to build a company from scratch, and being self-employed suits him. Freed up from Wall Street constraints, Dell can again operate in both a more strategic and agile fashion, and infuse employees with the entrepreneurial spirit as well. Dell’s high-level strategy remains the same to bring complete IT solutions to customers, be accessible and listen to what customer want. But the company can now more easily place some new bets to fulfill this mission. For example, Dell is investing to become a value-added cloud broker, positioning itself as an advisor to customers, rather than an OEM. In a very cloudy world, Dell’s Switzerland approach should be attractive to many customers. Furthermore, Dell has upped itsR&D spending from 1.6% of revenue to 2.1%. Last but not least, its hard to think of a more socially savvy tech CEO—listening ears are on!
4. Execs and employees are all in. Other than customers, employees are any company’s best advocates. But, when there’s a lot of uncertainty in corporations, employees usually look for the nearest exit. But Dell is an exception. Despite a long, drawn out, uncertain and contentious (aka Carl Icahn) privatization process, Dell retained many of its top execs, such as Karen Quintos Senior VP and CMO; Jeff Clark Vice Chairman, Operations and President, Client Solutions; and Tom Sweet, Senior VP and CFO. Dell also attracted the fresh talent required for its transformation, including Andi Karaboutis, CIO; John Swainson, President, Software; Suresh C. Vaswani, President, Services. Renewed energy, excitement and loyalty were palpable in my conversations with employees too: when I asked how and why they stayed the course, they said they believed in Michael Dell’s vision—and several told me they bleed “Dell blue.”
5. Investment in a collaborative partnering model. Dell’s direct connection to customers provides Dell with many advantages, and will continue to be a key route to market for the company. But, Dell is investing in the channel to ensure it can sell to and service customers in today’s increasingly omni-channel world. Dell has bridged what has sometimes been a gap in trust between it and the channel with a more collaborative partnering model. Dell is integrating regional channel and direct sales structures, paying Dell sales more for sales via the channel, and linking up regionally and locally with partners to pursue joint opportunities. Dell’s expanded portfolio also provides more partners with more headroom to grow with Dell. The results? Channel sales grew faster than direct sales in last quarter, and attach rates for channel sales are now within 3 to 4 points of the attach rates with Dell direct sales.
6. Ethics, sustainability and diversity. In May, Dell was recognized as a 2014 World’s Most Ethical Company by the Ethisphere Institute, an independent center of research promoting best practices in corporate ethics and governance. Quoting the Institute, the EI award is given to companies “that continue to raise the bar on ethical leadership and corporate behavior.” Dell has also been recognized as a leader in environmental sustainability for many years, and recently upped its commitment when it announced its 2020 Legacy of Good Plan. Among the 21 corporate responsibility goals outlined in the plan, Dell has set 12 goals specific to environmental sustainability. Building on existing initiatives, these 12 environmental goals focus on three areas: reducing the environmental impact of company operations, driving social and environmental responsibility in the industry and supply chain, and promoting technology’s role in addressing environmental challenges. Finally, Dell’s executive team and workforce are diverse. Dell has also stepped up to help women entrepreneurs via Dell Women’s Entrepreneur Network (DWEN). Recent research from The Intelligence Group’s Cassandra Report indicates that among millennials, 59% say that a company’s ethics and practices are important factors in deciding what brands to buy. Pretty powerful stuff—and very tough to fake.
7. Stringing pearls instead of looking for one big rock. Dell has been investing strategically to acquire the IP and expertise it needs to package software and services in a more digestible way. While the theme at last year’s DAAC centered on the 12 acquisition Dell made, this year, the vendor spent more time discussing progress to integrate them and bring more complete solution value to customers. For instance, John Swainson discussed how, in the mobile management area, Dell combined Wsye, KACE and other assets for a single enterprise mobile management (EMM) solution to manage PCs, Macs and mobile devices. The vendor is looking to doing something similar in the cloud, giving customers a way to manage public, private, multi-cloud environments with open, scalable solutions. More recently, Dell acquired StatSoft, and intends to leverage this to reduce entry costs and barriers for customers in the analytics area. Just as important, Swainson emphasized that Dell will follow “the 80/20 rule,” to keep its software solutions as simple as possible to acquire and use.
8. The PC isn’t dead! There’s no question that the traditional PC market is declining, but Jeff Clarke took the stage to the tune of “we are not dead yet” from Monty Python’s movie Spamalot to deliver his “Top 10 reasons the PC is (not) dead” message. Good news for Dell, as PCs are the entry point for 70% of new customers. Of course, Dell also offers a growing array of other client devices—from Wyse thin clients to Chromebooks to tablets and laptops.
9. SMB growth and focus. Good segue from #8, as Dell’s fastest growing client business is the SMB market, which grew 28% in the last quarter. In my opinion, the “personal” in PC translates into Dell’s capability to expand SMB business into other solution areas. Furthermore, in an age of technology consumerization, consumer, prosumer and small business are inextricably linked. PCs provide Dell with a launch pad to expand SMB business into other areas. Dell’s direct model, which enables Dell to reach deep into SMBs, its continued focus on listening to customers, its new, collaborative partnering model and vision to sell more value at lower cost, should help keep Dell on this SMB growth trajectory.
In a nutshell, this isn’t your father’s Dell—or Wall Street’s Dell. It is Michael Dell’s Dell now, and it’s starting to benefit not only from being a private company, but also from the fact that as a private entity, it can more fully capitalize on the equally advantageous qualities summarized above.