Michael Dell: We Are Not (Just) A PC Company

michael dell Oracle OpenWorld

Among the key points Dell raised:

1. Changing Role of CIO: Dell said the reality is technology is always changing. “But we are seeing a paradigm shift,” he said. And cloud is erasing the line between business and IT, Dell added.

2. We Still Love Hardware: Without mentioning Hewlett-Packard by name, Dell took a few shots at HP’s potential PC division spin-out. Dell said his company has rapidly evolved from PCs to servers to cloud solutions.

“There are many reasons to stay committed to the PC, he said. “There will be two billion PCs in a few years.” Dell estimated that 95 percent of disk drives are in PCs, and five percent are in servers. A company without PCs can’t gain volume pricing advantages for server components, Dell asserted. “The client offers enormous scale,” said Dell. “Give up that scale and you need to raise your prices.”

3. Total Picture: “Dell is not a PC company,” he said. “Dell is an end-to-end solutions company, and we understand the endpoint is a huge part of the solution. We are more than just hardware.”

4. Services: Dell mentioned that Dell Services — which expanded through the Perot Systems acquisition — is now 45,000 people strong and the number one provider of healthcare IT services. Of course, Michael Dell was addressing customers primarily, rather than partners. Hang out with Dell Channel Chief Greg Davis, and you’ll hear how Dell partners with VARs — but Dell’s services strategy is undeniable.

5. Acquisitions: Dell mentioned multiple deals — EqualLogic, Compellent, Force10 Networks, KACE,  Boomi and SecureWorks — that are pushing Dell into storage, security, networking and cloud integration solutions. Dell noted that Force10 is widely deployed in major IT environments and certified with Oracle Enterprise Manager 12c, a new management platform.

On the cloud front, Mike Gregoire, CEO of Taleo, described how Boomi allows his company to integrate multiple cloud solutions. Next, Dell shifted the conversation to SecureWorks, noting that Dell monitors 15 billion security events every day for several thousand customers worldwide. Dell said the company protects $14 trillion in assets in the financial services market. Kent Polzin, director of IT at Racetrac Petroleum, joined Dell onstage to describe his company’s use of SecureWorks. Polzin said Racetrac also is a Dell managed services customer.

6. The Dell-Oracle Relationship: JP Sarkis, VP of packaged applications for Dell Services, joined Dell on stage. Sarkis said Dell had been spending 70 percent of its IT budget on maintenance on 30 percent on innovation. More recently, 52 percent of Dell’s IT budget focuses on innovation, with 48 percent focused on maintenance. What drove the shift? Standardized business processes that leverage Oracle on Dell, plus a service oriented architecture (SOA), Sarkis claimed.

7. Dell PowerEdge Servers: Dell said his company is preparing the 12th generation of its PowerEdge servers. Dell asserted that the company will continue to offer the most comprehensive family of x86 servers. Dell said the PowerEdge systems will benefit from the little-watched acquisition of RNA Networks.

Bottom Line

Michael Dell was on-message. Instead of attacking HP at length, Dell quickly covered his commitment to PCs before shifting the conversation to Dell’s end-to-end solutions strategy.

Dell’s decision to share the stage with two customers — Taleo and RaceTrac — was effective. No long PowerPoints. No major product demonstrations. Just a conversation between Dell and two prime customers. Smart.

Heck, The VAR Guy realizes Dell continues to face margin and growth challenges. And some channel partners will worry about Dell’s services statements. But Dell’s overall tone and message was on target today.