Dell builds up services network for enterprise clients

ROUND ROCK, Tex. — Dude, you’re getting Dell . . . services?

The company best known for its direct sales model has more to offer than hardware, executives said during a series of briefings at its worldwide headquarters. Having

so far weathered the IT industry downturn, particularly in the struggling PC market, Dell now wants to reinvent the business model for professional services and fit it into the firm’s overall strategy.

Jeff Lynn, Dell’s vice-president of services, said he views the company as a product organization with services, as opposed to IBM, which tries to specialize in both. Despite its recent move into the handheld market, he said Dell’s goal is to entrench itself as an enterprise computing force and not simply a PC and laptop company. The rules of engagement for enterprise customers changed, he added, when Dell began offering servers and storage devices.

“”We were dealing in the enterprise with buyers who had different buying expectations,”” he said. “”They expected to see services wrapped around our hardware that made it look very quickly more like a business solution.””

The end result is a four-legged framework whereby Dell will offer professional services (including application development, consolidation and Internet business); deployment (custom delivery, installation, asset management); support (software, hardware, same day); and training/certification.

The services network has been built through a combination of partners employing a total of 30,000 people and 8,000 Dell employees in 170 countries. Dell took a Darwinian approach to selecting partners. Lynn used the storage group for the Americas as an example. The company started with 20 partners and narrowed it down to six based on technical prowess and experience. Those six then submitted pricing and offers for fixed services Dell wanted to provide; two more were then discarded. The remaining four are now competing for a big slice of the pie. The majority of the work will be given to the partner with the happiest customers. Partners vary from very large global partners to fairly local competitors, he added.

As it enters the services arena Dell be competing not only with IBM but HP, whose merger with Compaq Computer Corp. was driven, in part, by a potential to compete on services. Lynn, however, believes Dell’s services model to be unique.

“”Much of the professional services set of offerings can be made to look quite standardized with a fixed price and product-like, and that’s not unconventional wisdom,”” Lynn said. “”Most companies and most of our clients believe that professional services is somewhat more of an art than a science.””

Wyndham Hotels is currently a student in the Dell lab. The chain, which has hotels in Quebec and Ontario, recently decided to revamp its business process model, according to director of IT Andy Miller. It chose Dell equipment and a variety of services like training and asset management to handle the job.

“”We have to manage everything centrally. We don’t have any IT staff at these hotels, or very few,”” Miller said. “”So the more tools we can get from Dell to tell us exactly what the performance is of the equipment, (that) allows us to manage it that much better.””

Miller credited a custom portal where it can place orders online, get quotes, track purchases, support and service history for improving budget predictability. He also highlighted the advantage of removing the middleman.

“”Wyndham has chosen Dell as our large account reseller for Microsoft, Symantec and Veritas products. There are many intangible cost savings associated with standardizing — going to Dell once and ordering at one time.””

Lynn would not reveal what percentage of revenue goals or what percentage of revenue Dell derives from services right now, or its goals under the new strategy.

 

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