It’s been a bit over a week since Dell Enterprise Forum Australia, and I’ve now had some time to process everything I learned.
In short, Dell needs to reset and start again.
No One Hates Dell
Halfway through the event I realised something: no one really hates Dell. I know someone who had a bad experience with some Force10 network gear, and I’m sure there are others who aren’t super-fans, but the general feeling, at least in Australia, seems to be one of ambivalence.
This is remarkable when you compare the strength of feeling about Dell with that of some other icons of the tech world. There are people who loathe Microsoft, IBM, HP, EMC, NetApp, or Cisco. Some of Oracle’s loyal customers appear to hate them with the burning heat of a thousand suns while simultaneously paying them loads of money every year.
But it’s almost like Dell is invisible.
I was talking with one of the VRTX guys, and he lamented that Dell hadn’t done a great job of marketing the product, because sales were sluggish. I was a bit surprised, because I reckon it’s a great unit for the price, and is well positioned for the SME market. The server folks at Tech Field Day 9 were drooling over it. But it looks like no one’s really heard of it down here.
On the flip-side, no one really seems to love Dell either. Their employees are generally fans (tempered by the usual petty bureaucratic nonsense all large companies have), and some customers with recent positive experiences are pleased, but I don’t get a sense of strong feeling. Not in the way people feel about Apple or Microsoft, anyway.
Who Are Dell?
The concept came up again and again, from the Keynote to the closing. People kept saying that customers know Dell make PCs and laptops, but they don’t know about all the other stuff that Dell now do. When talking to customers, Dell keep hearing “Oh! I didn’t know you did that!”
In a sense, this is a failure of marketing communications. If people don’t know about you or what you do, they can’t seek you out. They don’t know that you could help solve their problem, so they can’t become your customer. If they know about you, but think you do different things, they’ll just exclude you from consideration, and won’t become your customer. That’s not good.
Part of the problem stems from Dell having bought all these companies, which came with their own brands. In Branding terminology, Dell is a branded house. It has one brand, the surname of the founder, and it’s been on everything they sell for ages. Anything new Dell acquires has to be rebranded as Dell, because otherwise it messes up the brand architecture (I’ll spare you the technical Branding digression). Go to www.quest.com, and you see the Dell logo.
But doing the rebrand takes time, as all the existing customers are used to talking about Quest software, not Dell software, and people take time to change. Some brands have become Dell sub-brands, like Compellent, so they live on in customer’s minds even longer.
I commented to Joe Kremer, who heads up the South Asia/A/NZ part of Dell, that Dell doesn’t know who it wants to be when it grows up. This gave him pause. I commented that it’s ok, as Dell is well capitalised and has decent cash flow, so they have some time to figure it out, but not forever. Joe seemed intrigued by the way I’d put it, so who knows.
Opportunity Rather Than Failure
The combination of customers not really knowing what the modern Dell does, and not having strong opinions of Dell one way or the other, means Dell actually have a tremendous opportunity here. They can become almost whatever they like.
Within certain constraints, such as being a tech company, Dell have a blank canvas on which to paint a picture of their future. A picture of a not-for-profit promoting the teaching of poetry in the developing world would be a mistake, but anything even close to what Dell are doing now would be just fine.
I expect to see a few key components:
- Open, not closed. It came up in the keynote, and in several conversations: Michael is betting that Open will win. Hence their embrace of OpenStack, which kind of goes against the strident pro-Windows stance of last year.
- Solutions, not products. Dell have made remarkable progress on this front, and I expect it to continue.
- Full stack solutions, with a pick-and-choose model. Dell will be happy to take your money to go all-Dell, but if you want to test the waters, they’ll hold your hand.
- More announcements. I expect to see Dell announce more new stuff into the market as they integrate various acquired products and services. The pace internally will quicken now that public company stuff isn’t required.
Now, none of this is all that surprising, and almost every company says this is what they’re doing in one way or another, but if you’ve read my commentary, you’ll see that Dell are taking a specifically Dell approach to this, which is a good thing.
And they do actually seem to be pulling it off.
Dell World 2013
I commented last year that Dell was midway through a transformation, and could succeed, but might not. I’m surprised at how accurate my thoughts were, to be honest. And if you look at my predictions near the end, I’m frankly astonished at how close I got:
- ROI and Case Study stuff: Yes-ish. The people at the media briefing from Enterprise Forum talked a lot about cost reductions, and you should know by now how I feel about that. Technically it’s ROI related, so I’m right, but I’m not that happy about being right. I score a B.
- People moving around a lot more? No idea. N/A score for me.
- Customer stories of solutions success? Bigtime. All the customers at the briefing were on about that, not speeds and feeds of isolated gear. A+ for me here.
- Time taken? Some. A managed service capability? I spoke to Angela Fox who runs that division for AsiaPac and Japan. Dell are definitely doing this. A+ again for me.
- Dell’s advertising. This is a missing piece. I still think Dell need to do it, but going private meant they couldn’t change their public ads too much until the transaction was complete.
Dell is absolutely going for the full-stack, services and solutions model. The PC business will live on, but will be a smaller part of Dell overall, not because it shrinks much, but because Services will grow so much. Joe Kremer mentioned at Enterprise Forum that Dell gets about a third of revenues and over half its profits from services now. That’s a good jump from my financials analysis last year.
I’m lucky enough to be going to DellWorld again this year (thanks to Dell!) and I’ll be paying very close attention to the keynote from Michael. Nothing much was announced at Enterprise Forum, apparently because it’s too close to DellWorld, and things are very hush-hush inside Dell, according to my sources. I expect to hear at least one major announcement that grabs people’s attention.
Dell in 2014
Here are my predictions:
- Services will grow, and come to dominate revenues and profits. I don’t deserve any points if this happens, because it’s stating the obvious.
- The commitment to Windows will be less emphasised. Microsoft are changing CEO, so the top-end relationships between the two companies are changing. I expect the sense of desperation to be gone.
- Dell will relaunch their brand. The privatisation transaction is done, and so instructions to creative agencies will have gone out. By their nature, these things are secretive, so we won’t see much until launch unless there’s a major leak. It won’t be a re-brand, because that would be stupid. There’s nothing wrong with the current logo and slogan, and brand equity takes time to build.
- Dell will figure out who they want to be when they grow up. Michael can finally tell people what he wants his company to be.
- Dell will kill a bunch of brands. Products and services will be consolidated. Not everything acquired is worth keeping, and Dell will need to focus a bit more so that the overall strategy works. It won’t be a wholesale slash-and-burn, asset stripping 1980s fest because that guy didn’t end up buying the company. It’s be surgical removal to align with strategy.
- There’ll be a combination of layoffs and hirings, but it may well just be through natural attrition, rather than actively firing people. Dell is largely a nice company that doesn’t do that to people, and their macro-strategy doesn’t require it. It’s all about putting staff where they’re needed, not just cost-cutting for the sake of it.
- Dell’s marketing will finally crank into high gear, particularly on the comms side. People will be educated about what Dell is about, just as soon as Dell figures it out.
My opinion was a bit mixed on Dell last year, but I’m warming to them. While not quite bullish, I look forward to DellWorld 2013, and Dell in 2014, with cautious optimism.