Top Managed Service Provider Trends and Challenges
I was at a Dell launch this week and listened to Kirk Schell walk us through Dell’s recent successes, introduce a broad series of products, and talk about some of Dell’s more interesting initiatives. Dell is the largest company I’ve ever personally covered going private and the impact on the firm is, I think, very interesting. From desktop products and servers to security and services, Dell is actually very unique in the market.
Let’s talk about some of the more interesting tidbits.
Security
One of the things I took exception to when Schell was presenting was that Dell had world-class security solutions, largely because I’m used to comprehensive providers like Intel/McAfee. However, what I clearly didn’t understand is that Dell builds on top of the base offerings that Intel/McAfee provides in an effort to enhance rather than compete with these offerings. This is actually the old model that helped build the PC and x86 server business in the first place. Take what Intel and Microsoft built as a baseline, and then make them better. In effect, it is a super reseller of this technology because, unlike other resellers, it has an impressive amount of software capability to wrap offerings from the core vendors and make those offerings better and/or more customized than if you went directly to the source or through another reseller.
I think the market broke when many of the OEMs decided that they knew better how to build what Intel and Microsoft did and began to compete with them instead. I can see mistakes on both sides causing this, but the result is sub-optimal because these OEMs don’t leverage the core capabilities coming from the massive research efforts funded by Intel and Microsoft. Contrary to trend, Dell is leveraging those capabilities, which is what gives it the product breadth and depth that allow it to accurately state that it can supply a comprehensive security solution.
Hardened Line
One of the product announcements Dell highlighted is the launch of its hardened PC line. Now, these machines are designed to military specifications and the line puts them in more direct competition with Panasonic, which is the company that owns this segment with Toughbook and ToughPad. No other firm has a full line of hardened products and some unexpected benefits to the rest of Dell’s PC products should result.
Building a hardened line, rather than just outsourcing one or two hardened products, forces a company to look at the causes of failure far more closely. People’s lives depend on machines in this class; if they fail, you could literally lose a customer to terminal event. This means a level of testing that goes well beyond what you’d typically do for a PC.
Much like racing passes through knowledge of how to build engines that are more powerful and more reliable, building hardened computers teaches a company how to do things differently so that the products it builds are less likely to break. I’ve seen this happen in the past; you start to build a set of unique people with skills that can anticipate reliability problems and better address them before they get to be your problems.
Better Focused on Customer Needs
Going private took a large number of high-profile needs off of the table for Michael Dell and his staff. You don’t realize it when it happens because it tends to be gradual, but when a company goes public, much of the focus in that company shifts to keeping financial analysts happy, and there isn’t much left for anything else. I think that is largely why so many of the companies in technology seem to play follow the leader. They just don’t have the bandwidth to listen to customer needs or innovate. In fact, innovation creates risk, and they are so afraid of making a mistake that they just march in lockstep behind whoever looks like they have a clue. Much too often, that has been none of them.
Dell is suddenly free to innovate. It showcased a unique laptop bag that is TSA compliant and has dedicated pouches for all of your gadgets. It announced a power supply for a laptop with a built-in backup battery so your laptop could charge in your laptop bag, and put a ton of focus on building a tablet keyboard that actually felt good to use. One of the most fascinating products is the Chromebox for meetings, one of the lowest-cost, most interesting video conferencing solutions I’ve yet seen. Finally, Dell showcased a tool that would quickly and easily put what is on your tablet onto a monitor and attach a full set of accessories so, if you wanted, you could transform your Android or Windows tablet into a full PC.
Wrapping Up: Regained Passion
These things are just indications that Dell is starting to look very different from other firms in its space. It already had a merger and acquisition process that uniquely protected the acquired company’s core assets and culture. Rather than fighting with Google, Intel or Microsoft, it is figuring out ways to make the offerings from those companies better and using the leverage that built them more effectively again. It is starting to innovate in a number of areas, thinking about what customers would want that they don’t now have, rather than just emulating whoever else seems to have a clue.
In listening to Schell, I heard passion again, something I thought the segment had lost some time ago, outside of Apple. It is back again in Dell. Now, I don’t think going public has to take the passion out of a company. Apple showcased that under Jobs. But it often can. Dell is becoming a reminder of what the industry lost, and while I’m not sure you have to go private to get it back, getting it back should become higher priority than it is.
In the end, it is clear that the executives are having more fun; working with a company whose people enjoy what they are doing is a treat if you haven’t done it in a while. Going private may be one of the major cures for the technology industry’s many issues of late.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+
