Dell‘s Annual Industry Conference (#DAAC) in beautiful Austin, Texas. I have staged and attended many conferences like this before and this was similar to those, but also different in many ways. I’ll get into later. One thing that kept repeating through my head was that Dell has all the characteristics to drive some serious enterprise and services revenue. Hewlett-Packard and IBM better be taking them seriously in these spaces or face the consequences.
Dell’s leadership team was aligned, consistent and confident with
their content, responses to Q&A, in 1:1′s , and yes even consistent
at cocktails. I met with most of the business leaders and I even
grabbed (literally) time with Michael Dell
and Jeff Clarke. This wasn’t the type of fake and staged consistency
we have all encountered before in our business careers. I have sat in
their chairs in my 20+ year PC, server, and chip career, and this was real.
What was clear was that Dell is all about business markets and in big
business, it’s all about software and services. Hardware is important,
but where hardware is subservient to the solution, it takes a back
seat. Sure, Dell is using hardware as a weapon to get service
contracts, which shouldn’t be underestimated. Hardware is still vital
in the mid-market business, too, but again, is a lane to future
services. Oh, I also heard one “fun-fact” on services that meant a lot
to me. Dell announced as enterprises moved to Dell from Perot services,
they re-upped 100% of the contracts. That says a lot.
I had many very deep conversations, but one of the more intriguing conversations I had was with the lead experience designers.
Yes, Dell has experienced designers, and from my vantage, good ones.
They lead the experience for hardware and packaging, traditional in
most companies but also software design and OOBE (out of box
experience). More recently, they are coming off a huge success with the
Dell XPS 13 Ultrabook, which is currently viewed as the best on the market.
I challenged them on how they would keep the success moving forward and
they pushed right back. Great design comes from the top down, else
teams are arguing over saving the $.05 it took to add rubber bumpers.
It is clear that the entire leadership team sees the value in design,
specifically as they consider the consumerization of IT. This then
leads to the consumer business.
A few months back, the consumer division was wrapped inside
the SMB business. It was initial concern of mine given the huge global
growth in consumer. That says a lot and certainly says that consumer is
not a focus. Even though consumer contributes to 20% of Dell’s today
revenue, they view it as opportunistic and will take the business where
they can but won’t sacrifice the business market doing it. We won’t be
seeing the “Dell dude” anytime soon. The word “consumer” was only used
in the context of the “consumerization of IT”. It will be a future
challenge to address the consumerization of IT with a business focus,
but I give Dell a better chance than anyone. If Michael and Jeff think
consumer design is important, it will be important. It’s as simple as
that. Now onto phones.
One of the biggest questions I had walking into the event was where Dell stood on phones. I’ve been very clear
that I think any manufacturer who still thinks client computing is
important must design and sell phones, no matter how scary that looks
right now. No one wants to model their future business on what they see
from Nokia or RIM. That’s when I was so surprised when they very
casually announced that they would be launching phones toward the later
part of the year. Dell views the phone as another corporate client at
the same level as the PC, tablet, or Wyse terminal. To give it access
to the entire enterprise, it needs the deployment, security, and
manageability features as the other network clients. Before you snicker
and feel good that your iPhone is connected to the corporate email, can
you get access to your ERP, RDB or Sharepoint consistently? I didn’t
think so. Dell already has wins inside the U.S. Federal government
based on this approach for tablets and will take this approach more
broadly with smartphones. On the nuts and bolt level, Dell is taking
standard Android and “hardening” it with their own proprietary software
and will also be looking with Windows Phone 8 (Apollo) for those
customers who want end-to-end Windows.
My final thoughts on Dell’s event revolve around Dell’s approach to
penetrate the enterprise. My first litmustest I make is on strategy, and
I can smell a good and bad strategy
very quickly. Dell’s strategy foots with me and it makes sense to me.
Dell is the services newcomer and will use HP and IBM’s size and
entrenched status against them. This is a classic judo move to turn
your competitor’s strength into a weakness. Dell can approach the
enterprise and make credible claims about getting in and out very
quickly and using more industry standard technologies. For the IT shops
that are sick of seeing other manufacturers come in and stay for a
decade or believe the entrenched manufacturers are slow, this is a
refreshing change. Dell has nothing to lose and everything to gain here
as they move up the enterprise food chain.
HP and IBM better be closely analyzing Dell’s precise moves or they
could find themselves positioned as the “old guard” as the new guard
Dell walk in and gobbles up the business.