It was a long time in the making coming, but the acquisition of EMC by Dell is over and the new entity, Dell Technologies, is in business. In a discussion with new global VP for cloud client computing solutions sales, Rance Poehler, iStart got some insights into what customers can expect from what is today the world’s biggest privately-owned technology firm.
But first, some quick history. Dell made its name by eschewing the traditional channel, initially selling desktop and later laptop computers ‘direct to order’, consequently moving up the stack to flog a wide range of enterprise hardware, and then advancing into consulting and services (notably, with the 2009 acquisition of Perot Systems), where the real margins are to be made. It didn’t stick with the ‘no-channel’ schtick, eventually acknowledging and embracing the value and reach added by a partner network.
For its part, EMC started out – no kidding – selling furniture before moving into ‘microcomputers’ and ultimately storage. It took an early and commanding lead as one of the major movers and shakers in an industry which, owing to ever spiraling demand for capacity, looked likely to grow forever.
But hardware margins never were destined to be exciting in the long term and, as commodisation took hold, new competitors emerged. As the tech industry crashed post-2000, it went awfully close to the line. The stock price plummeted to just US$5 in 2002, from a high of $100 just two years prior.
Long before ‘digital transformation’ was a thing, EMC had to do just that. It realised that hardware, while important and absolutely necessary (who doesn’t like a data centre filled with reassuring blinking lights in blue, green, amber and red…OK, nobody likes the red ones) just wasn’t the way to make money. After all, hardware is just tin and anyone can make that.
So EMC went on a big shopping trip, snapping up a lot of software and services companies, notable among them Legato, VMWare, Documentum, Captiva and RSA Security. EMC went from a storage company – ‘where information lives’ to an information management company. And it still sold plenty of hardware.
Dell Technologies today
In the leadup to the acquisition, and reflecting the considerable software and services portfolio owned by EMC, Dell carved itself back to its initial core business by selling its software and IT services businesses. That was part of a rationalisation which is intended to allow the remaining bits which had to come together, to play nicely; in a recent briefing, CEO of the company which still bears his name Michael Dell said it is ready to help enterprises tackle the Internet of Things and digital transformation challenges as ‘the next great technology company that can do more to advance innovation at scale than any company on the planet.’
While Dell Technologies is the umbrella company, it has operating businesses which sell PCs, servers, storage, networking and software products. Assets include Dell’s PC and servers, EMC storage, VMWare, RSA, Wyse, Force10, Pivotal software and Boomi cloud services.
Closer to home, Poehler said Dell Technologies is building an end-to-end solution company (we’ve never heard that one before) and explained that before he joined the company earlier this year, and prior to the acquisition, there was a regional focus on delivering solutions to the market which is changing with the execution of a global strategy.
He said the transition has been underway since Dell purchased Wyse Technology back in 2012 and started its move into the desktop-as-a-service business (a move described by Business Insider at the time as ‘boneheaded’. It quoted an analyst who said ‘Dell could have chosen to partner with Citrix and VMware more on software’. Dell now owns VMware).
But Poehler focused on one aspect in particular to drive the point of how the new company could be expected to operate: “In the last year, the company is really starting to move to becoming an end-to-end VDI [virtual desktop infrastructure] provider. Essentially, with the appliances, the brokerage applications like Citrix and VMware, and then utilising the Wyse thin client, the company is moving to more of a solution approach.”
This is a direct response to what customers and channel partners have been asking for – less focus on technology and more on solving business challenges, said Poehler. A refrain familiar, perhaps, to those who have been in the industry for a long time, where the conversation has routinely hinged on the necessity to get away from ‘box dropping’ (of the sort on which the ‘old’ Dell and EMC built their initial empires).
Part of this has been the development of solutions that focus on specific verticals, explained Poehler, such as health care and education. These have been developed with focus groups and used to develop specific programs including training and certification.
“We’re going to look like a very different company. Not a box-driven company [there it is], but a solution-driven one,” he said. “From the customer perspective, we’re an end-to-end service provider from the data centre to the applications all the way to the thin client.”
In addition, Poehler said Dell Technologies has reference architectures to assist businesses make the business case and assemble a proof of concept environment to demonstrate the potential value of the solutions it provides.
As a now privately-owned entity – which is where Michael Dell’s entrepreneurial flair, and that of the late Dick Egan, EMC co-founder, really shone – Dell Technologies arguably has more freedom and greater autonomy to act. Will this, plus the massive portfolio to which it lays claim, give it the edge over major competitors like HPE and IBM? Time will tell.