By Charles King, Pund-IT, Inc. May 17, 2017
In last week’s Pund-IT Review, I discussed Dell EMC World 2017’s central theme, Digital Transformation, how it related to the evolution of both companies and why that makes the combined organization an astute guide for businesses pursuing transformative efforts.
This time around, I’d like to aim the lens back at the company and consider how Dell’s acquisition of EMC is both enabling and powering the transformation of its traditional client PC group and the newer OEM/IoT business unit. The thoughts and conclusions I’ll share are based on meetings I had at Dell EMC World with company executives.
A new age for Dell’s client/PC solutions
It’s hard to think of an IT hardware vendor more firmly rooted in personal computer history and innovation than Dell.
PCs inspired Michael Dell’s development as an entrepreneur working out of his Dobie Center dorm room at UT-Austin. Sidestepping PC market conventions and reimagining ossified manufacturing and supply chain processes allowed Dell to challenge and quickly surpass numerous, supposedly indomitable rivals. In fact, in 1992 PCs enabled Dell to become at age 27, the youngest-ever CEO of a Fortune 500-ranked company.
But while they were essential to both Dell’s and Michael Dell’s remarkable success, PCs also cast a long shadow that occasionally dogged the company. The inability to escape past successes contributed, at least in part, to the 2007 firing of Dell CEO Kevin Rollins and Michael Dell’s return to that position. During the past decade, as Dell has steadily rebuilt the company as a purveyor of end-to-end, desktop-to-data center enterprise-ready solutions, competitors and critics tried to dismiss the efforts as overreaching by “just a PC company.”
Dell and company proved the naysayers wrong but also made substantial changes to the company’s PC business and portfolio along the way. While Dell endpoints once emphasized function over form, the company has since won numerous awards for desktop and laptop design excellence. Those successes also sparked significant share gains against notable opponents, including HP and Apple.
Increased efficiency and satisfaction
But the word at Dell EMC World 2017 was that PC markets, especially for business client devices, are continuing to evolve. According to Sam Burd, EVP of the Dell Client Group, the ongoing digitization of global businesses and continuing consolidation of IT markets and vendors are fundamentally shifting PC solutions requirements. To succeed, Dell “must continue to help IT organizations become more efficient, and also increase end user satisfaction.”
How will the Client Group achieve that? Through a mix of technological advances and practical services. For example, Neil Hand, the Group’s VP of Product Strategy and Innovation, discussed how Dell’s recently introduced Canvas solutions can be personalized for individual users, an important point for flexible workspace environments. He also noted the increasing focus on virtual and augmented reality (VR/AR) solutions for businesses in areas, including oil and gas exploration, healthcare and manufacturing.
Those points were echoed by Rahul Tikoo, GM of Dell’s Precision Workstation group, an organization that enjoys steady, continuing share growth. According to Tikoo, Dell is investing heavily in VR/AR markets through three main product groups, underscoring the belief that Dell end users will, “Consume on Alienware, create on Precision and be served with PowerEdge.” Tikoo agreed with Hand’s assessment of VR/AR target markets but also noted areas where Dell is working with customers on cutting-edge solutions, including immersive environments for healthcare treatment and industrial training, and interactive tools for retail stores and marketing campaigns.
What about “practical” issues? John Moody, VP of Dell’s Client Services organization, discussed details of the new “PC as a service” and “VDI Complete” offerings introduced at Dell EMC World. In essence, these new solutions allow organizations to acquire packages of endpoints, peripherals and services with no upfront costs, and pay for them on a fixed, per seat/per month basis. The focus on OPEX rather than CAPEX drastically reduces the complexity of buying PCs and, as Moody said, “Makes the (PC) acquisition, deployment, management and retirement process as simple and automated as possible.”
OEM/IoT – Dell EMC as a partner/enabler
I’ve followed Dell EMC’s Global OEM (original equipment manufacturers) and IoT (Internet of Things) organization since early 2012, when SVP and GM Joyce Mullen began leading the group. Mullen is a longtime Dell executive but her current work is also informed by her previous positions with the Cummins Engine Company.
The OEM/IoT organization focuses on numerous markets. One of the larger is with customers who are using Dell technologies, including PC, server and storage components as the computerized “brains” behind products, such as arcade games, manufacturing floor equipment, medical scanning devices, digital advertising displays and point of sale (POS) terminals. Another is in providing customer-branded or co-branded solutions, like the systems employed by telcos and other service providers (SPs).
Dell EMC OEM offers a range of services, including development/design assistance, manufacturing and product support. The company also partners with many companies to enhance marketing and sales. For example, Dell EMC offers many customers the option to sell their products (with individualized SKUs) through its dell.com online portal, a process that can significantly extend the market reach and impact of smaller organizations.
During our conversation, Mullen said that Dell EMC OEM continues to enjoy significant revenue growth. Like the rest of the company, the group doesn’t share financial information but she noted that a recent survey by VDC Research (on Merchant-Embedded OEM Global Share based on 2016 Dollar Volume Shipments) showed that Dell EMC has surpassed HP and is now the #1 WW OEM Provider.
Mullen also noted that the group is increasing its integration of EMC technologies after finding traction with solutions including Isilon scale-out storage and Data Domain deduplication. SPs, including telcos, continue to be a key market for Dell EMC OEM, and EMC’s core storage portfolio is finding lots of interest among those customers. Another promising space is with smaller, software-focused start-ups that prefer appliance-style systems for supporting their service offerings.
The group’s sister IoT organization has notched some impressive wins and won several design awards. But the IoT market is still in its infancy and faces significant challenges, ranging from management complexity to security concerns to customer confusion about the nature of IoT. That said, Dell’s cold chain logistics solution (for maintaining optimally low temperatures for dairy and other products during shipping and sales) is a notable success story cited in several conference presentations.
Like most IT vendor conferences, Dell EMC World focused enormous energy and attention on big-ticket strategies, like Digital Transformation. But the real value of those efforts is often found closer to the ground, among individual product groups and in customer testimonials.
It’s also well worth considering how and how well a company is putting more strategic imperatives to work within its own organization. From my discussions with executives from the Client Group and the OEM/IoT organization, digital transformation is alive, well and growing among both company customers and within Dell itself.
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