My Take on Dell’s Solutions Strategy

Discussions regarding Dell’s solutions strategy have increased recently. It started at the Sanford Bernstein Strategic Decisions Conference, Michael Dell discussed Dell's shift away from PCs. Those discussions continued last week with Dell activities at the Cloud Expo in New York and the Dell Storage Forum.

Dell’s solution strategy is about combining our  hardware heritage along with enterprise technology we have been building over the last few years via acquisitions. Feedback from media and analysts who joined us at the Dell storage forum illustrates that point. In his Network Computing article, here’s what Steve Wexler had to say:

“These types of scalable solutions will be the norm over time in the enterprise, and here we have Dell as one of the vendors leading the way. Did we ever think we’d say that about Dell storage?”

There’s strong evidence the strategy is working, starting with our Q4 and year-end results for FY11. That momentum continued into our Q1 results for FY12 which happened last month. Among the highlights in Q1: revenue from Enterprise Solutions and Services grew 5% year over ear to $4.4 billion. We launched vStart, which allows us to deliver fully pre-configured virtual machines. Dell-owned intellectual property (IP)  from storage technology including Compellent, EqualLogic, PowerVault and DX Object Storage grew revenue 11% year over year. Moving forward, we’ll continue efforts to drive even more revenue through Dell-owned IP.

We’re also making investments to enhance our technology solutions capability. In April,  we announced a $1B FY12 investment in technology solutions and services. These investments will result in building out next-generation cloud data centers, and the expansion of Dell Global Solution Centers to help customers architect, validate and build solutions that power their businesses. Earlier this week, we opened our first Solution Center in Limerick, Ireland.

 Additionally, we’re investing heavily to train and rewire our sales force to deliver customer-centric solutions, that expand across our product sect, to help our customers increase IT efficiency. For instance, our Intelligent Data Management solutions help customers increase the value of stored content by providing them with efficient, intelligent and automated storage, data and decision management.   

What do these kinds of changes mean to Dell moving forward?

  • In comparison to our past, today’s Dell has evolved from a PC manufacturer to a true IT solutions partner – one that offers a differentiated view of the enterprise. Much of Dell’s growth today is being driven from the commercial side of Dell’s business where about 80% of Dell’s revenue comes from.
  • Compared to the competition Dell’s strategy is all about providing open, capable and affordable solutions and services to global business customers of all sizes. 

We’re committed to building out our solutions strategy, with many of the pieces already in place. We’ll continue our efforts to build more capabilities around services, technology and storage to meet the needs of our customers. For long term success, I think a lot of people here understand that strategy is key—and so is execution.

About the Author: Lionel Menchaca