By Charles King, Pund-IT, Inc. November 12, 2104
Dell World 2014 took over the Convention Center in Austin, Texas last week with the aim of showing thousands of Dell customers and partners how the company is doing and where it’s headed. That the message was highly positive was not surprising – few, if any, IT conferences are “gloom fests.” But it also brought to mind just how far the company has come since last year’s Dell World, which occurred just weeks after its bid to return to private ownership succeeded.
That was a big deal for a number of reasons. For one thing, Michael Dell and his supporters’ plan was vociferously resisted by Carl Icahn and other so-called “activist investors” who attempted to pressure Dell (as well as other publicly held companies) with schemes designed to enhance their own holdings rather than measurably improve their targets.
Dell effectively kicked Icahn to the curb a few weeks after Time magazine labeled him “the most important investor in America.” Why is this important? Because Dell’s privatization bid and the company’s success since then offered businesses an alternative scenario to Wall Street’s roller coaster, speculative obsession with quarterly earnings and myopic investors’ inability to recognize or appreciate long-term business sustainability.
Obviously, not everyone is paying attention. Divestments by competitors, like Hewlett-Packard’s (HP’s) plans to spin-off its PC and printer divisions into a separate “HP Ink” organization, are the antithesis of Dell’s effort. Over time, it will be interesting to see just how well each strategy plays out but from what I saw in Austin, Dell is on a roll.
PCs – Not dead yet
Dell’s move to private ownership also occurred as the PC market was showing signs of a steady, welcome revival. In fact, as PC and notebook sales continued to accelerate through 2014, there have been few if any of the headlines seen in past years intoning the impending “death of the PC.” That’s mainly because the good news has extended across the entire PC ecosystem to include component manufacturers and other suppliers.
Plus, both consumers and businesses seem to have realized that, 1) while tablets are great for content consumption, they’re not so good for content creation, and 2) that using tablets as “companions” to PCs and smart phones can enhance the value of all. This has resulted in considerable success among PC vendors, particularly Dell, which noted that its global PC shipments have risen 10% YOY, and that it gained 3% in its share of U.S. PC sales (to 24% of the total) over the past year compared to average industry growth of just 0.2% during the same period.
Most importantly, though, Dell and other vendors have made effective use of innovative PC components and technologies, such as compelling new Intel microprocessors, increasingly robust battery/energy efficiency performance, highly attractive ultra-thin notebook designs, innovative packaged and cloud-based applications and Microsoft finally pulling Windows out of its self-inflicted death spiral.
At Dell World 2014, I attended a number of PC/notebook-focused events, including previews of upcoming products (covered by a non-disclosure agreement, so I can’t reveal the details) and a demo of a new immersive “Smart Desk” for graphic artists and designers. What I can say is that 2015 looks like it will be a helluva year for PC users in general and Dell customers, in particular.
Dell ProSupport and other services
I also spent quite a bit of time at Dell World 2014 with the company’s services organization, including attending a tour of the ProSupport Global Command Center at Dell’s Round Rock headquarters. For anyone who doesn’t know, ProSupport and ProSupport Plus are global support services for about 115M Dell devices located in 160+ countries. Services are delivered by some 24,000 tech support and field engineers in 55 languages.
Dell maintains five Command Centers (the others are located in Limerick, Ireland; Kawasaki, Japan; Xiamen, China; and Penang, Malaysia) which serve as clearing houses for service queries. Along with dealing with distressed customers and overseeing problem resolution, the Command Center monitors and responds in advance to events that could impact Dell customers, including breaking news stories, weather and natural and man-made disasters.
What sort of responses are we talking about? During the winter of 2013, the Command Centers tracked numerous weather events, including major hurricanes and tropical storms. By analyzing the assets of Dell customers most likely to be affected, the company was able to proactively move replacement equipment and parts into nearby warehouse facilities so reacting to service calls would not be delayed or disrupted.
Dell says that ProSupport and ProSupport Plus enjoy a 93% customer satisfaction rate. After touring the the Round Rock Command Center, I could understand why. My time there was limited but it gave me a taste of the continuing responsibility and demands that follow selling business-critical IT assets to organizations worldwide. I expect to hear more about enhancements to Dell’ssupport services in 2015.
Dell PowerEdge FX – Systemic innovation
One of the most interesting announcements to come out of Dell World 2014 was the introduction of Dell’s new PowerEdge FX architecture, a highly dense rack server design that squeezes an impressive amount of compute power into a very small space.
How impressive? The first FX product, the PowerEdge FX2 (a 2U form factor) is fitted with six server, storage and network IOA “sleds” that can support up to 16 sockets (eight 2-socket servers) and 128 cores. Dell also noted that a 10U FX model will support up to forty 2-socket servers, which the company calls “unsurpassed” in terms of traditional rack system density. That makes FX a powerful and intriguing alternative to proprietary blade server architectures.
More importantly, these systems can be flexibly configured in numerous ways. For example, FX sleds can be maxed-out with CPUs for commercial HPC applications. Or customers with intensive OLTP requirements can pack sleds with SSD storage to support blazing fast transactions.
Dell designed PowerEdge FX with cloud computing and analytics in mind, but the architecture is flexible enough to support numerous use cases, including converged system applications. The fact that FX solutions can be purchased directly or through Dell’s growing channel means the company very wisely doesn’t intend to keep all the FX fun to itself.
What companies do is often less important than who they do it for. The motivations are as numerous and various as the companies themselves; to pursue competitive differentiation or market opportunity; to pursue the plans or desires of senior executives; to follow boardroom decisions or accede to shareholder demands; to substantially benefit customers and partners.
In the case of Dell, this last point seems paramount. In his Dell World 2014 keynote, CEO and Chairman Michael Dell noted that while there are seismic changes afoot in the IT industry and among many vendors, it is worth asking who those changes will benefit. In Dell’s opinion, change is not about pursuing a particular business model so much as it is about wholesale digital reinvention. Throughout this process, Dell remains fully focused on its customers.
Those were big words, but the evidence to back them up was clear throughout Dell World 2014. The move to private ownership has allowed Dell to ignore the whims of the market and demands of self-serving activists. The company’s research and development efforts focus on products that help customers achieve new goals and perform common practices more effectively. The Round Rock Global Command Center offers concrete proof of Dell’s continuing effort to focus on and fulfill its customers’ needs.
That focus on customers has become finer in the year since Dell World 2013, and we expect it to become finer still, to Dell’s customers’ benefit, in the months and years ahead.
© 2014 Pund-IT, Inc. All rights reserved.