PAUL HEARNS speaks to Dell’s head of services for EMEA, Tom Kitt about the company’s plans for a stronger focus on services
Even today, when people think Dell, they think of PCs. Of the people, who know Dell, the majority would probably think of servers too, and some might think of peripherals. However, there may be few among those aware of the Dell brand that would associate Dell with services. Given the track record of Dell, in the server market for example, the other players in the IT service market should perhaps take notice when a declaration is made to focus on services.
Tom Kitt, vice president of services operations for EMEA, aims to alter perceptions. “It’s not very well known but Dell has been in services for quite a long time. Expect to hear a lot more from us in this space”, said Kitt, referring to the fact that Dell has vast experience in support services from buying additional support for your laptop, to vast networks of engineers to support servers and data centres. But also, for some time, Dell has forayed into areas it refers to as managed and professional services. “For example, what we are doing now in terms of peripheral products, printers, cameras etc, we are going to do exactly the same on services. We think for a long time customers have paid too much for their IT services and our plan is to bring commoditisation type strategies to the market, utilise our skills in the supply chain and package services in a way that is transparent, customers know exactly what they are getting and what they are paying for, and that has resonated with our customers.”
Strategic initiatives
“Over the last couple of years, Dell has gone on record as saying one of our strategic initiatives is to leverage the direct model in other areas.” With services identified as an area that could lend itself to the direct model, Dell is approaching it in a typically Dell fashion. “We would definitely have it as a key strategic objective for the company, to grow our services business profitably. Leveraging the direct model fits very well into what we want to do here. We are not trying to do something different here, we are just trying to utilise what we have already in the business that’s different. We know we can be disruptive in the services market.”
Describing two key areas for services, Managed Services and Professional Services, Kitt indicates the demand from customers, “More and more we are moving into managed services where companies are saying ‘we are working with the same three or four all the time, I need something different. You are good at this stuff Dell, you do this stuff yourselves, can you come to the tender service and bid on the business of managing my IT?’ We have a pipeline in Dell of customers wanting us to do more and more of that. On top of that we have Dell Professional Services where customers are saying, ‘I am not quite sure where to take my data centre, I am getting a lot requests for additional storage, with additional things, and I don’t want to pay a lot of money for someone to tell me what I already know, Dell can you help me out in figuring out where I need to go in terms of migration and applications.”
State of services
The state of the services industry currently leads Dell to believe that its operating model has much to offer, “It is a very big business but it is very much disjointed, there are huge possibilities for someone to standardise, commoditise and bring the same kind of things to this business as that we brought to the product business.”
“If we bring this disruption to the market utilising our supply chain etc, customers will win. They will win on transparency, they will win on price and they will win on customer satisfaction, I have no question in my mind that that will work.”
Kitt, however, is keen to point out that Dell is not moving away from its support services, “We are not going to go away from the Complete Care, Enterprise Gold and Platinum services. We absolutely want as many boxes that ship out of manufacturing facility, to have as much service with them as is possible and we will continue to drive that, but we are growing two separate business here on top of that and that is Dell Managed Services and Dell Professional Services. We will grow them in the way them in a way that works for Dell, which is profi growth in quarter one.”
The services industry though has matured somewhat since the first wave of outsourcing some years ago. Hard lessons have been learned as many large companies brought outsourced services back in house, or failed to see the promised savings. “We are well aware of the pitfalls and there are lots of them. I think the industry has changed a lot and matured. Once outsourcing was every CIO’s answer for the last five or seven years, everyone has learned a lot of lessons.”
Operational company
“Dell is a very good operations company, whether you work in manufacturing or sales, or wherever, fundamental to us is good operational practise. Dell takes care of making things happen, every hour every day on the assumption [that] if I add up every hour that is a success, every day that is a success, it becomes a quarter and a year that is successful.”
“We are taking our operational focus into services and it is working very well. Where we don’t have a lot of traditional expertise is in managed services and professional services. I think we are doing a good job in developing some of our own services experts into those arenas and augmenting some of those skills by bringing in people from outside. Our head of services for EMEA, Josh Claman joined us two and half years ago from NCR. He brought a lot of knowledge with him and has helped develop the team at Dell. He also brought some people from outside. We now have a very good mix of internal operational people and external skills that work well within the direct model.”
Seeing the relationship as the foundation of any services model, Kitt expresses strong views on the relationship dynamics, “The key thing in professional services, and managed services, is the relationship with Dell. With a single point of contact there is no question of ambiguity. We are very keen to make sure that the customer knows very clearly where the accountability is, and it is always with Dell.”
Reeling in revenue
While the professional and managed services will be areas of focus, in relative terms, support services still represent the largest proportion. “Support service is still the largest area in terms of revenue. The next biggest is managed services and third is professional services. And that is exactly the way that we want to grow those businesses. We want to continue to grow and develop the relative to the market, investing heavily in Dell Managed Services and Professional Services.” “We are a reasonably-sized services company today, and people probably aren’t aware of that”, added Kitt
Within professional services, there is a specific focus on enterprise, “There are a million and one things you could target in professional services. In Dell we are going after enterprise first. A lot of what you are seeing today fits our strategy in building and growing our infrastructure around enterprise support. What we are doing here [EMEA Command Centre] is making sure that when a customer has an event it gets solved on time to the customer’s satisfaction. The Expert Centre in Dublin which has all of the support for our Platinum and Gold, Silver support for enterprise customers in EMEA all fits into the model in growing our enterprise support. The Dell Professional folks we have onboard are focused on enterprise. We are very strong on building on migration services. A customer who is on suite A and wants to move to suite B, it could be Exchange and they are not quite sure where to with their email tem. We have been through all of these changes in Professional Services. Dell can help make that migration.”
“A very nice business is the whole subsequent area of training, a lot of customers look for either online training, classroom training using Dell facilities, or customer training in their own facilities. So after we do the consultancy in terms of migration and the hardware infrastructure, we can provide the training and we would classify all that as Dell Professional Services.”
Awareness
The problem of awareness of Dell as a service company seems less of a problem for existing Dell customers. In 2003 Sherry Fitzgerald, the real estate and financial services company, had a requirement for an improved and consolidated IT infrastructure across core sites. Brian Dooley, IT manager, said “we were already a Dell house”, but a migration was envisaged, “we knew what was on the way in terms of OS with Windows 2003, and Exchange 2003.” Dell Professional Services, through Sureskills, provided an integrated solution covering server and storage consolidation, application consolidation and support. Designed by Sureskills, the solution was implemented through JLS Technology for Dell, said Dooley. “Sureskills looked after the migration, imaging PCs. All hardware was backed up with Gold support and it is very good.” On the whole, Dooley expressed a positive experience with Professional Services. Dooley said they had “no problems, few failures and would definitely go back again.”
Aircraft maintenance company Shannon Aerospace Limited (SAL) reported a similar experience. In 2004 SAL awarded Dell a contract to provide improvements in the IT infrastructure. In recent years the aerospace industry has under gone something of a revolution in documentation. With aircraft maintenance manuals and records moving from paper and microfiche to electronic formats, the need for fast access to database information as well as the usual IT needs of a large organisation has meant major changes for most maintenance houses. Based primarily around storage as well as core infrastructure, the SAL solution involved centralised back up via Commvault Galway.
Both processes were characterised, according to the customers, by attentive presales and consultation and competitive pricing.
Disruptive influence
Previous examples of Dell declarations to focus on markets has shown it capable of the type of disruption that Kitt describes. The IT service industry seems now set to receive this disruptive influence on the back of the recent declaration. There seems no reason to doubt Dell’s sincerity of intent in the endeavour. Admitted short comings in certain sareas appear to be addressed in both internal up-skilling and a hiring policy, coupled with a willingness to work with partners such as Sureskills.
Traditionally, organisations looking for services perceive experience and reputation in the area as key selection criteria. However, as the recent reports of early outsourcing experiences have shown a level of dissatisfaction with traditional service providers may indeed drive people to look elsewhere. Despite negative rumblings from consumer customers in the US as reported in the American Consumer Satisfaction Index, here the IDC report “IT Trends and Expenditure in Ireland” reports that for the fourth successive year, Dell was the company considered as having the most enhanced reputation. If Dell manages to avoid the pitfalls of its more experienced competitors, then its reputation, direct model and experience from previous disruptive initiatives may allow them to establish themselves as a viable alternative to the current market leaders in services.
