Seven Lessons From the Dell-Everdream Deal

As you likely heard, Dell is acquiring Everdream, the software-as-a-service and managed service platform provider. I firmly believe this will be part of a growing trend in 2008. Here are seven key lessons and considerations to keep in mind as Dell digests Everdream.

7. Dell Won’t Be Alone: At some point, other hardware providers (Hewlett-Packard, in particular) will have to make more aggressive plays in the managed services market.

6. Maintain Eye Contact At All Times: Although managed services are often considered “remote” administration platforms, don’t forget that managed services also involve on-site care as part of a monthly support contract. Dell and other big hardware providers can’t match that level of face-to-face service. If you don’t visit your customers regularly for higher-level strategic discussions, you could become a “faceless” consultant who loses control of the account.

5. Friends Could Become Enemies: Some MSPs criticize Dell today. Frankly, I think a lot of the criticism is unwarranted — or at the least, premature. And remember: “Channel friendly” companies like Microsoft are now pushing CRM software services directly to customers. Cisco and Symantec have both told me they don’t intend to compete with VARs in the MSP space. But I can’t say the same for many other technology providers.

4. Shareholders First: Will Michael Dell betray the channel? I doubt it, but I could be naive. We can all find some clues as he speaks to shareholders through quarterly releases, SEC filings and other briefings. Michael’s top goal is delivering shareholder value. As long as the channel aligns with that goal, VARs can depend on some sort of channel commitment from Michael.

3. Everybody Has Their Price: Some MSP platform providers have aggressively attacked and questioned Dell’s move into the managed services market. But they’d change their tune if Dell came calling with a lucrative buyout offer. Whenever you read any type of Dell coverage, consider each source’s vested interest. (Full disclosure: I own fewer than 100 Dell shares.)

2. Platform Alliances: If big hardware companies like HP don’t make MSP platform acquisitions, there’s a very high probability that HP and others will ink extensive partnerships with the platform makers. I hear HP is close to announcing one such deal, but I can’t go into details quite yet.

1. What’s Your Exit Strategy?: You may love your MSP platform provider today. But what if they’re acquired by a company that has a flawed business philosophy or weak channel program? You’d better have an exit strategy that allows you to migrate rather easily onto another platform. Remember: Some MSP platform providers are looking at 2008 or 2009 as the year they launch an IPO—or get acquired.