Legacy IT vendors transform to survive the mobile, cloud evolution
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AUSTIN, Texas -- Big IT customers of Dell would like to see the hardware company’s investment in third-party companies pay off in the form of a coherent services and solutions provider strategy.
As it sits now, the strategy may be clear to Dell Inc.’s own executives, but the company has more work ahead to convince IT shops that it will complete a successful transformation and not die of indigestion. At what is only its second annual conference here this week, Dell executives offered some updates as to how it would address the challenges of building a modern IT infrastructure.
Executives acknowledged what the changing data center trends have wrought upon Dell, which is traditionally a PC and data center hardware vendor. Though Dell continues to grow its server, storage and PC lineup, the company made big acquisitions of 2012 – Quest Software Inc., Wyse Technologies Inc. and SonicWALL – to name just a few, and it is still sorting through the morass as it crafts a cloud and IT services story.
Dell bought Quest last July for $2.6 billion and continues to dig through that company’s huge portfolio. "There are products and features and features and products," said John Swainson, Dell’s president, Software Group.
The company has integrated some products but in a few cases even its experts disagree on what is and what isn’t a SKU. Consider Quest’s multi-faceted Foglight performance monitoring technology. It was unclear which of the various versions of the products were actually features and not full-blown products.
Dell is also zeroing in on some key areas, such as database tools, where it will double-down, Swainson said. With back-up and recovery products, Quest had four products and Dell had one. "We’re creating a family," he said.
Meanwhile, Quest VDI customers remain in limbo, and some are concerned about the future of the company’s desktop virtualization software, as Dell continues to promote partner Citrix System Inc.’s VDI offerings. One Quest VDI customer based in the U.K. said his Dell-Quest account executive is scheduled to provide a "roadmap and a reassurance exercise" this week.
Dell’s strategy remains an enigma
If the view from the inside seems a little murky, imagine how it looks from the eyes of the IT pro trying to make sense of it all.
"[Dell] seems to acquire companies so fast they don’t seem to know what they have," said Dave Adams, CIO at the American Enterprise Institute, a Washington, D.C. public policy research organization. "I would like them to have a coherent plan."
Another IT manager said he doesn’t mind Dell’s rapid-fire acquisition strategy so much. But he says the company is unable to market those services. In other words, Dell seems to communicate internally just fine; it’s customer outreach that’s not so hot. The customer said there was at least one time when he purchased a product from another third party because he was unaware Dell had a competitive offering.
"Dell needs to get closer to its customers," said the IT director of a large Seattle law firm, who requested to remain anonymous.
On its transformation from a hardware company to a cloud services or solution provider, it would seem Dell has an uphill struggle, considering the head start from competitors such as Amazon, Rackspace, IBM and others. But Dell’s Swainson said customers will likely split their workloads between Amazon, Rackspace or another, and on-premise.
Some analysts agree Dell has its work cut out to establish itself as a creditable services and solutions provider, although the company is not without some assets it can leverage.
"Dell has a sizeable footprint in the enterprise market , where they can leverage existing relationships with customers to raise awareness of things like their cloud and security services, management software and storage products," said David Daaoud, an analyst with IDC in Framingham, Mass. "But is problem is: How do they tie these products to the broader services and solutions? It’s not yet abundantly clear yet."
There are Dell customers who are prepared to let Dell take the time to find its footing. Noble Energy, Inc. a Houston-based oil and gas company, runs an internal private cloud for virtual machine management. Due to the proprietary nature of its business, Noble would not consider a public cloud. For them, Dell is important given that it is already in use for enterprise IT.
Within Nobel, Dell’s stature has suffered ups and downs, as has HP. But the company has moved in the right direction, said Rolando De La Fuente, a Linux systems administrator at Noble. Amazon doesn’t jump to the head of the line at Noble, as "[Amazon] was born in the Internet age, and we are 80 years old," said De La Fuente.
But Dell still has to prove itself to its customer base that is increasingly checking out cloud services. Customers expect Dell to get into the cloud business, but would they buy? "I’d have to see the offering first," said American Enterprise Institute’s Adams.
Read what Dell had to say about data center network architecture with SDN automation.
Executive Editor Ed Scannell and News Director Bridget Botelho contributed to this report.