When you think of Dell—a $60 billion company—what comes most immediately to mind?
For Dell's liking, I'll bet way too many people would answer notebooks, supply-chain wizardry, built-to-order PCs, and yesteryear's dippy hipster hawking the line, "Dude, you're getting a Dell!"
And maybe far too few thought of this: each and every day, about 1 billion work and play in Dell-powered clouds.
Recently, the company's gained some notoriety as the x86 provider of choice for powering the stupendous data centers for many of the world's largest web companies, including Facebook, Amazon, Microsoft, Salesforce.com, and some of China's biggest online businesses. But even though that's been a huge achievement for Dell, those megadeals have also partially reinforced the perception of the company as a very large and mightily efficient but not terribly strategic IT player.
All of that, however, seems to be about to change dramatically as Dell is looking to reposition itself—and not just cosmetically—as a customer-driven and forward-looking business-technology partner with expertise in virtualization, cloud computing, and "solution stacks" that help CIOs hammer away at the 80/20 spending trap that starves innovation and growth opportunities.
At the same time, Dell is also planning to come at the market from the other end of the spectrum with a forthcoming family of tablets aimed squarely at the Apple iPad but designed from conception with enterprise connectivity, management, security, and compliance as indispensable priorities.
And Dell believes that new emphasis on flexible and strategic enterprise solutions, in combination with all of the products and capabilities for which it's well known, will give it the blunt-force strength to take on the biggest enterprise IT players without having to sacrifice the agility and speed it has mastered over the years.
"Dell is going through classic brand transformation that all IT brands go through," said Andy Lark, VP of marketing Dell's Large Enterprise division, in a phone call this week. "This type of thing doesn't happen quickly and we know it'll take us a while but we're up to it.
"At the core, Dell is shifting from being the industry value leader to being the value leader plus the company that can deliver the best solution stack.
"For us, that means keeping that stack open, and customers tell us that's one of the things that differentiates us: we're not burdened with loads of legacy business models and legacy engineering requirements and legacy IP that we have to try to drag into the future," Lark said.
Taking a shot at primary competitor HP, Lark said this about Dell's perceived advantage:
"We're starting from a fresh new position—we don't own a big networking company [hello, HP and 3Com] and we want to keep our stack open. Because of that, we can surprise a lot of customers with the level of flexibility we can bring to an engagement, and we're seeing more of that every day."
Before getting Lark's specific thoughts on how this transformation at Dell is taking shape, I wanted to be sure to get his sense of just how Dell defines "open," which is a concept that has been bent, folded, spindled, and mutilated so many ways that, by comparison, it makes the term "cloud computing" seem sharply precise.
Asked if the brutally overused term "open" still has any equity—and if so, how does Dell define it—Lark conceded with a laugh that open is "definitely the most abused term in IT marketing. But what I say to customers is that the acid test on whether a vendor's really open or not is for the customer to ask that vendor what they don't have to buy from you."
In that context, he said, competitor Cisco is flying in the face of customer preference: "Cisco's approach is that you can have my UCS (Unified Computing System), but you can only have it my way: you can't choose any other hypervisor but Cisco's, or the server form factor you'd prefer, or the type of storage you want—it's all got to be from Cisco, and that's the very definition of a closed, proprietary stack," Lark said.
"And the history of our industry says that the closed approach like that fails miserably every time it's tried."
So armed with that sense of how not to proceed, how does Dell plan to weave heavy-duty cloud solutions plus enterprise-optimized tablets in with its current blend of products and services to become a strategic IT partner for CIOs for the next decade?
"CIOs are telling us they're pursuing IT evolution through virtualization, and they're talking about finding the path to the private cloud through virtualization, so that's where one of our primary focuses is," Lark said. "Their thinking reflects a shift away from repeatedly buying one server for one app, to simply acquiring wide swaths of computer power that can be scaled up or down for a wide range of applications based on need."
That has led Dell to develop a spectrum of solutions ranging from cloud server platforms to completely modularized data centers. In a blog post Thursday, Lark cited two new Dell customers whose business required some very untraditional thinking about how to deliver those types of data-center capabilities into challenging physical environments: Carnival Cruise ships and TeamLotus Formula 1 racing company.
From Lark's blog post:
"But, there was a catch: [TeamLotus] needed to analyze that data on the racetrack. So, we worked with Lotus to develop a mobile data center which can collect and process thousands of megabytes of data from each lap of a race, enabling engineers to make real-time adjustments to the cars either during or after a race. Instead of shipping the hardware to all 19 races they attend worldwide, Team Lotus is now equipped with a consolidated data center, built to withstand extreme weather conditions and geographical terrains, as their new trackside solution."
Back in our phone chat and with that type of scenario in mind, Lark described a powerful trend among IT executives in which their thinking uncouples business capability from rigid in-house infrastructure. "I spend 30-40% of my time with customers and this is what we hear from them most consistently: 'I want to deliver IT as a service. I'm less and less interested in infrastructure and more and more on the service delivery so we can focus on how we optimize the workload.' "
In Dell's ongoing transformation, he said, that means the company must show it's capable of delivering on that profoundly different set of needs being expressed by CIOs: "Now their concern is the transformation of the entire business and they want not just some fancy notebooks, but rather a fully integrated information environment from cloud to mobile devices and disaster recovery with enterprise-level user management and authentication and so on.
"And large corporations don't even ask us about buying notebooks—instead, they ask us, 'Can you provision all these workers for me?' "
Which led to the final piece of our conversation: Dell's belief that the iPad's current reign as the coolest enterprise device ever created will be short-lived.
"Among our customers, we're seeing the rise of what we call the information consumer—they're very light on the actual processing of data, but very very high on the consumption and analysis of it," Lark said.
"We'll soon have a full suite of enterprise tablets specifically designed for these information consumers. The buyer in the enterprise doesn't want an iPad"—I had to stifle a laugh; by its first birthday in April, businesses will probably have purchased about 10 million of them—"but they do want a fully configured and delivered enterprise tablet that's packaged with full support and maintenance, and flexibility in carriers, and highest-level security, and parameters for storage and provisioning and managing the whole experience."
I admire Dell's pluckiness in wanting to transcend its solid but limited past, and I admire its vision in charting out a course that will let it leverage its traditional strengths as it expands into higher-value enterprise offerings. And as Lark said, transformations at IT companies with $60 billion in revenue don't happen overnight.
But time is not on Dell's side—to achieve the set of ambitious goals outlined above, the company will have to bring to its new future the same hair-on-fire urgency that made it so successful in the PC business that's now becoming a part of its past.
Bob Evans is senior VP and director of
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