Even Dell’s CIO avoids using the channel

A severe thunderstorm warning kept Dell Computer Inc.‘s chief information officer Susan Sheskey from her customer meetings in Toronto on Wednesday, but she took the time to speak with ITBusiness.ca about Dell and AMD, Google and, of course, its relationship with the channel.

Sheskey, who graduated from Miami University in Oxford, Ohio, began her current role last August and is responsible for Dell’s global information systems and technology infrastructure. Prior to becoming CIO, Sheskey was Dell’s vice-president of information technology for the Americas region. Sheskey joined Dell in 1993, bringing with her 20 years of experience at Ameritech and Ohio Bell.

And in case you’re wondering, Sheskey does not use the channel. Here’s what else she had to say.

ITBusiness.ca: Dell recently announced, after months of speculation, that it will use AMD Opteron in its multi-processor servers. Dell’s acquisition of Alienware, which uses Intel and AMD in its products, has some people speculating that it’s not a matter of if but when Dell will use AMD chips in notebooks and desktops.

Susan Sheskey: At Dell the core strategic differentiator for us is the Dell direct model. Inherent in that is our direct connectedness with our customers. We will always use the products and service offerings that our customers wish us to use to differentiate that overall customer experience. We’re utilizing Intel today, we will consider any and all technologies to enable that customer experience over time.

ITB: But nothing specifically planned yet?

SS: Not at this point in time.

ITB: Dell and Google recently announced an agreement to preinstall Web and desktop search software on Dell’s computers. How does this deal impact the consumer’s ability to choose what software they want on their PC?

SS: Following up on the first comment that I made, it’s one of these initiatives where our customers are looking for the best capabilities resident on their product. In this case, a Google search engine will tremendously enhance their capabilities.

Every aspect of what we do at Dell will focus on differentiating that overall customer experience, being directly connected to them so we understand what their issues are, what their concerns are, what technologies will enable their business more comprehensively. Those are just another example of how and where Dell is choosing to differentiate itself by being customer focused.

ITB: HP recently said it’s hurting Dell’s PC sales to businesses with its direct sales program targeted at corporations and also because of Dell’s poor service track record and direct selling tactics. How are Dell’s PC sales in the enterprise?

SS: Eighty-five per cent of business is derived from the corporate market. We compete in every aspect of the technology space from the desktop to the data centre. We absolutely differentiate ourselves or our services capability whether that’s services of the products we’ve sold or our ability to provide management services to customers in their data centres.

There are subtleties in the Dell direct model that are difficult to comprehend. While others, HP and others, have tried to emulate that over the course of time, the fact of the matter is that’s very difficult to do because it has grown as part of our business over the course of 22 years. It’s not just the differentiation with the overall customer experience, it’s differentiation in terms of how we manager our product suppliers and overall supply chain itself.

ITB: Wal-Mart recently announced that it is selling computer components for people to build their own PCs. How will this impact Dell’s PC sales to the consumer and small business markets?

SS: We interface with over three million customers a day. The hallmark of the overall customer experience at Dell is that ability to directly connect with our customers, understand what the customer is really looking for in terms of product and in terms of service offering and be able to quickly react to those needs through the efficiencies we have in our supply chain management.

ITB: Dell, along with other big hardware manufacturers, recently joined AMD-backed non-profit organization, The Green Grid. Power consumption has become a key issue for IT managers. How will this be reflected in Dell’s business products?

SS: We’re looking at being industry leaders in setting the standards for how our products should work to the best advantage of our customers in the data centre and on the desktop. Helping to drive the standards around the thermals and power consumption is just another hallmark of our product leadership in terms of where we’re able to differentiate ourselves with out customers.

ITB: Sun has made specific announcements around power consumption with its Niagara server line. Will we see announcements like this from Dell?

SS: We have invested significantly in product development from defining it right to designing it right to building it right. All aspects of our products have been significantly enhanced. In the fiscal year of ’06 we will have the largest and highest quality products that we ever have in the marketplace.

ITB: Dell has quietly been using solution providers for years but has built its brand around its direct sales approach. Financial analysts say that a strong channel is vital to the health of the company down the road. Why isn’t Dell more forthright about its channel plans?

SS: We are very forthright about the Dell direct model. It is absolutely the driver to the success that we’ve had over 22 years. It provides us with a very unique relationship that we have with our customers. It also clearly helps us with the cost advantage of our customers.

ITB: When you say customers are you referring to solution providers or end users?

SS: I’m talking about end user customers whether those are consumers buying the products or global corporations that do business with us.

ITB: Dell does use a channel of solution providers to serve its products.

SS: We had a Dell managed services offering where we will manage the assets of our customers in their data centres. We will do those in collaboration with our service providers.

ITB: Does Dell have a plan to build out more of a channel?

SS: We are always looking at new and innovative ways to best serve our customers. But our plans are our plans as of today.

ITB: Do you buy anything from the channel?

SS: No. I buy from Dell direct. I have almost 100,000 clients in a managed environment and I run Dell’s business Dell on Dell with 15,000 servers. By any metric, I am running Dell’s business 95 per cent Dell on Dell.

ITB: Dell has been accused by its competitors of pricing systems at a loss to the Canadian government to drive away competition. Is this a good strategy long term?

SS: We price to be competitive.

Comment: info@itbusiness.ca

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