Dell pushes services beyond the personal computer

AUSTIN, TEX. — As IBM prepares to hand off its PC business to China-based Lenovo, Dell Inc. is trying to redefine itself as more than a PC vendor.

The company, which made a name for itself by selling desktops directly to customers, reiterated in a briefing for analysts and press its plans to

grow from US$49 billion to US$80 billion in annual sales. However, the firm spent much of the conference reinforcing the fact that it is no longer just a PC manufacturer but a technology company that offers both professional and managed services for enterprises.

“”The desktop business is important to us, but it’s going to become less important in the future,”” said Dell CEO Kevin Rollins. Desktops represent only 40 per cent of Dell’s revenue, he said. This figure doesn’t include mobile products.

According to IDC Canada, the overall PC market, which it defines as desktops, notebooks and x86 servers, is down. People no longer need computers in several locations, as they can take their PCs with them. Work-issued laptops also mean that some don’t buy home PCs, said Eddie Chan, a research analyst with IDC in Toronto. Dell is No. 1 in the PC space, he said.

Debora Jensen, vice-president of the Canadian advanced systems group at Dell Canada in Brampton, Ont., wouldn’t answer questions about what percentage of the company’s business north of the border comes from its enterprise offerings, saying only that it’s growing extensively.

Dell also emphasized the fact that it is in the printer business.

“”Toner and ink are like black gold,”” Jensen said. “”You could literally give printers away and sell ink.””

As far as its services business is concerned, Jensen said Dell does not bid on services contracts unless there is at least some Dell hardware involved.

Dell doesn’t want to be a one-stop-shop for services either, but instead wants to focus on its core capabilities for companies looking for a best-of-breed outsourcing solution, Jensen said. The company will work with partners to offer the aspects of a solution that it doesn’t specialize in, she said. Though Dell “”won’t architect a whole strategy”” for a company — its partners, such as Cap Gemini, will.

Dell’s aim is to help companies articulate business cases and lower their total cost of ownership, she said. It will work with customers that have mixed environments, using partners to manage non-Dell systems.

However, Dell may include contractual provisions that enterprise customers continue to use Dell equipment when a hardware refresh is due. The vendor will also respect a customer’s wishes if that customer wants to stick with non-Dell solutions, Jensen said, but pricing wouldn’t be guaranteed.

When Trader Media decided it needed to get its infrastructure under control, it engaged Dell’s professional services.

The Toronto-based publishing company was experiencing a period of rapid growth, and as a result its technology was inadequately planned, says the company’s director of information technology Paul Mullin.

“”We reached a point where we’d become sufficiently unstable that outages were common enough that publication dates were being missed and there was a significant impact to our business. At that point, it became very obvious that we’d have to take a different approach to how we fund IT and IT initiatives.””

Trader wanted to modernize its environment and engage help from a company that understood where the technology was heading, Mullin said. Dell helped Trader put together its data management strategy, the Active Directory and Exchange plan and also helped provide Trader with the majority of its hardware, with the exception of tablet PCs and some Macs they needed for publishing-specific applications.

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Jim Love, Chief Content Officer, IT World Canada

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