Crawford Del Prete - DellWorld 2012 - theCUBE
Crawford Del Prete, EVP and Chief Research Officer, IDC, with John Furrier and Dave Vellante
Dell is much more than the piece-part desktop and server supplier that many corporate executives believe it is, says IDC Chief Research Officer Crawford Del Prete. “They bought Perot systems, Compellent, Wyze, North End, Quest, to expand their footprint,” he says. Today Dell is expanding into Cloud services and has built a strong consulting organization. It is ready and capable of partnering with customers at a strategic level.
But despite Dell’s best efforts, except for the deep relationships with clients maintained by its large but slow-growing Perot Systems subsidiary, it is still seen mainly as the self-service server and desktop Web storefront the defined its initial business.
It isn’t that Dell isn’t delivering the message to the marketplace, Del Prete said in an interview in the Cube with Wikibon Cofounder/Chief Analyst Dave Vellante and SiliconAngle Founder/CEO John Furrier. “It’s that people aren’t listening because everybody has Dell on their desktop and Dell in their server rack.”
This is a problem for Dell in an industry where the traditional strong growth has slowed dramatically this year under the impact of server virtualization and a slow economy. “The market historically has been growing at 10% to 15% per year,” Del Prete said. “This year it will struggle to make 5% to 7%.” This is driving consolidation as the big players grow by acquisition rather than just showing up, and Dell certainly has been one of those doing the acquiring.
The overall strategy is to expand into areas adjacent to the vendor’s traditional focus. So for instance HP is now up to about 11% market share in networking from virtually zero a few years ago, taking customers mainly from Cisco but also from Juniper and other players. Cisco, meanwhile, has been finding most of its growth in the server market, where it had no presence until recently.
Today, Del Prete said, Dell has a strong server line. In networking it still lacks core routing but does have a top-of-the-rack switch. It also still has some holes in storage. But it is steadily filling those, and several announcements were made during Dell World to advance that process.
Dell, however, is also reacting to the changes in the market by moving up-stack. For instance, he says, it is pushing Cloud services. Today if you are buying a server on Dell’s Web site you will see a banner asking if you want to move that workload into the Cloud instead. This is part of a larger marketing effort to position the company as a worthy strategic partner that can help its customers optimize their IT strategy, including both internal virtualization and cloud and external IaaS, SaaS and similar public Cloud services.
“I spend about a third of my time talking to IT leaders, running our end-user business,” Del Prete said. “I see them in two categories. One is looking for the attaboy for cutting expenses as a percentage of revenue. The others are trying to grow their business. The first group is in a race to the bottom. The other is struggling with how to have that conversation around growing the LOB. How do you transform the business by enabling technology?”
Their problem, he says, is that they have spent their careers working with infrastructure, and today that is getting delegated lower in importance. “So yes, buy a new server, more storage. But if we are going to think about how to transform our business, that’s going to come from the LOB.”
It is this conversation that Dell is trying to enter, but the lingering perception that it is a piece-parts supplier is preventing customers from even considering inviting it to participate. “They don’t think of Dell as somebody who can transform my retail experience or transform my channel experience. They think of them as ‘I’ll go on the Web site and buy a server.’” That is a problem Dell’s marketing needs to fix.
An Infinitely Expandable Business Model
On the other hand, Del Prete says, “what Dell has is an infinitely scalable business model.” As it applies that business model to more profitable segments of the industry, it can fuel strong growth. This scalability is a competitive weapon that it needs to wield, and that includes applying it to cloud computing.
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Crawford Del Prete - DellWorld 2012 - #DellWorld #theCUBE
Crawford Del Prete - DellWorld 2012 - theCUBE
Crawford Del Prete, EVP and Chief Research Officer, IDC, with John Furrier and Dave Vellante
Dell is much more than the piece-part desktop and server supplier that many corporate executives believe it is, says IDC Chief Research Officer Crawford Del Prete. “They bought Perot systems, Compellent, Wyze, North End, Quest, to expand their footprint,” he says. Today Dell is expanding into Cloud services and has built a strong consulting organization. It is ready and capable of partnering with customers at a strategic level.
But despite Dell’s best efforts, except for the deep relationships with clients maintained by its large but slow-growing Perot Systems subsidiary, it is still seen mainly as the self-service server and desktop Web storefront the defined its initial business.
It isn’t that Dell isn’t delivering the message to the marketplace, Del Prete said in an interview in the Cube with Wikibon Cofounder/Chief Analyst Dave Vellante and SiliconAngle Founder/CEO John Furrier. “It’s that people aren’t listening because everybody has Dell on their desktop and Dell in their server rack.”
This is a problem for Dell in an industry where the traditional strong growth has slowed dramatically this year under the impact of server virtualization and a slow economy. “The market historically has been growing at 10% to 15% per year,” Del Prete said. “This year it will struggle to make 5% to 7%.” This is driving consolidation as the big players grow by acquisition rather than just showing up, and Dell certainly has been one of those doing the acquiring.
The overall strategy is to expand into areas adjacent to the vendor’s traditional focus. So for instance HP is now up to about 11% market share in networking from virtually zero a few years ago, taking customers mainly from Cisco but also from Juniper and other players. Cisco, meanwhile, has been finding most of its growth in the server market, where it had no presence until recently.
Today, Del Prete said, Dell has a strong server line. In networking it still lacks core routing but does have a top-of-the-rack switch. It also still has some holes in storage. But it is steadily filling those, and several announcements were made during Dell World to advance that process.
Dell, however, is also reacting to the changes in the market by moving up-stack. For instance, he says, it is pushing Cloud services. Today if you are buying a server on Dell’s Web site you will see a banner asking if you want to move that workload into the Cloud instead. This is part of a larger marketing effort to position the company as a worthy strategic partner that can help its customers optimize their IT strategy, including both internal virtualization and cloud and external IaaS, SaaS and similar public Cloud services.
“I spend about a third of my time talking to IT leaders, running our end-user business,” Del Prete said. “I see them in two categories. One is looking for the attaboy for cutting expenses as a percentage of revenue. The others are trying to grow their business. The first group is in a race to the bottom. The other is struggling with how to have that conversation around growing the LOB. How do you transform the business by enabling technology?”
Their problem, he says, is that they have spent their careers working with infrastructure, and today that is getting delegated lower in importance. “So yes, buy a new server, more storage. But if we are going to think about how to transform our business, that’s going to come from the LOB.”
It is this conversation that Dell is trying to enter, but the lingering perception that it is a piece-parts supplier is preventing customers from even considering inviting it to participate. “They don’t think of Dell as somebody who can transform my retail experience or transform my channel experience. They think of them as ‘I’ll go on the Web site and buy a server.’” That is a problem Dell’s marketing needs to fix.
An Infinitely Expandable Business Model
On the other hand, Del Prete says, “what Dell has is an infinitely scalable business model.” As it applies that business model to more profitable segments of the industry, it can fuel strong growth. This scalability is a competitive weapon that it needs to wield, and that includes applying it to cloud computing.
