Is this Dell's Carpe Diem Moment?

At Dell’s Annual Analyst Convention (DAAC) last week, Michael Dell and his top lieutenants echoed various memes that were evocative of a startup culture:

 

IT disruption, investing for the future and an obsessive focus on doing what’s right for the customer.

 

Unlike most startups, however, Dell has the technology solutions portfolio, the financial wherewithal, and the professional services muscle to back it up.

 

Dell and company seem to be riding high since cutting their public tether to the Wall Street gang 18 months ago. At DAAC, Dell and Marius Haas, Chief Commercial Officer and President of Enterprise Solutions, emphasized that since they are now off the “90-day (Wall St) shot clock,” they can make business investments with a 3-5 year time horizon in mind, rather than maniacally focusing on short-term earnings. This, they claim, will enable the organization to continue innovating on long term technology trends like security, cloud computing, and big data, which in the long run, they believe, will pay big dividends both to their clients and to the company’s bottom line.

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Dell is doing this while earning top customer satisfaction scores. In fact, Jeff Clarke, President of Operations and Client Solutions, stated that Dell had its highest customer Net Promoter Score (NPS) in their history. Not coincidentally, the 601 respondents to ESG’s 2014 IT Spending Intentions Survey, also gave Dell high marks in customer service and IT “value leadership.”

 

In fact, an oft repeated theme at DAAC was “doing what’s best for the customer”—regardless of if it’s an all Dell environment or a heterogeneous infrastructure with multiple vendors in the mix. And this approach seems to be resonating with IT buyers. According to Dell, they are now the #2 provider of servers globally and are only fractionally behind HP in terms of total number of units shipped.

 

This is a critically important metric since with every server sale, there is typically a lot of product “drag behind,” like storage and networking hardware. In fact, according to Dell, they shipped more internal and external storage capacity than any other vendor in 2014. 

 

Dell’s server beachhead can potentially not only be parlayed into selling peripheral hardware, but it can also enable them to establish a leadership position as an IT transformation enabler.

 

It’s important to point out, that by virtue of some key acquisitions, Dell has amassed an impressive array of enterprise software technologies that can be leveraged across heterogeneous infrastructure in a private and/or hybrid cloud environment. Their 2009 acquisition of Quest Software, for example, yielded Dell a powerful application performance management system (APM), called Foglight, which was also one of the very first virtualization management monitoring platforms in the industry.

 

Dell claims that Foglight can help manage tens of thousands of virtual machines (VMs) by providing actionable insights on the application health and resource utilization status (CPU/memory, storage, networking, etc.) across multiple hypervisor types (VMware, Hyper-V and KVM). And this APM tool integrates directly with virtualization and hybrid cloud management frameworks like VMware’s vCenter Operations (vCOPS), vCloud Director and OpenStack’s Horizon management dashboard. 

 

When combined with Dell's Cloud Manager and Application Services Manager (ASM) tools, businesses can manage application workloads across on-premises, private cloud resources in conjunction with public cloud environments like Amazon Web Services, Microsoft Azure, Google and others. This approach dove tails in with Dell's philosophy of giving customer's more choice. 

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From security and data protection to virtualization, software-defined networking and cloud infrastructure orchestration tools, Dell has the ability to help organizations non-disruptively transform their IT environments to protect critical data, drive down costs, improve performance and enhance business agility. And of course they have the professional services army to help businesses make this transition. 

 

What’s especially interesting for Dell right now is that some of their key competitors are currently going through some major transitions. This could create an opportunity for Dell to seize market share in accounts that they previously had little to no penetration in; enabling them to get further entrenched across mid-market and enterprise accounts. 

 

It’s quite possible that in several years, financial and IT analysts alike will point back to Dell’s decision to go private as a major inflection point both for them and the IT industry as a whole. As Dell’s executive team exhorted at DAAC: “Our time is now…”

Carpe Diem, Dell.

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