Dell's transformation from hardware vendor to a complete small business IT services company has evolved over the past three years. We look at what Dell offers small business today.
Most small businesses know Dell as an online seller of low-priced, customizable computer hardware. But Dell has in recent years evolved into something more. Its now a complete one-stop shop for small business IT needs.
Customers kept asking us for different things, kept telling us they needed more help, said Erik Dithmer, vice president and general manager of Dell's Small and Medium Business group in North America. For some things, we had to go out and build the capability.
The company committed itself three years ago to meeting the challenge from its small business customers. Today, IT services and solutions tailored to SMBs represent more than half of revenues in Dithmers group.
The portfolio includes consulting, systems integration -- especially in the vital area of application and server virtualization IT management and support, and increasingly, cloud-based software and services.
Dells earliest successes came in helping small business customers scope and manage server virtualization projects. Customers have saved tens of thousands of dollars following Dells advice and using its products, Dithmer said.
From Hardware to Small Business IT Services
You might wonder, though, how a giant corporation like Dell could know much about, or be sensitive to the needs of, small businesses. The short answer is: it learned. The transformation started with the establishment three years ago of a separate SMB division with its own general manager -- Dithmer -- and dedicated staff.
I only worry about SMB customers, nothing else, Dithmer said. I talk to [SMB customers] regularly, and every offering we provide is custom-built for small businesses.
Dell also undertook an intensive, weeks-long research project to pinpoint the top pain points SMB customers were experiencing. A few things came out of that work, said Mike Blood, senior strategist for SMB solutions at Dell.
One is that small businesses felt Dell didnt understand their specific industries, which inspired the company to drill down and focus on key verticals, such as retail.
Dell Retail IT Solutions
Dell now offers a comprehensive solution for retailers from storefront to back office, Blood said. It includes new point of sale (POS) terminals based on Dells Optiplex server line that make it easy to integrate third-party retail software solutions.
Dell is also building relationships with developers, most importantly Microsoft around its Dynamics customer relationship management (CRM) and ERP (enterprise resource planning) solution.
More generally, small business professionals wanted reliable, easy-to-maintain systems. They said they needed help to more efficiently maintain IT infrastructure and integrate disparate systems added over time. And they particularly wanted help with virtualization and cloud computing strategies.
Pain points concerning IT arise in part, Dithmer said, because small businesses lack adequate internal IT resources. Hence the need for simplicity, ease of maintenance, and outsourced consulting and integration services.
One other thing came out of the research. We realized that to do a really good job on these things, we would have to own the technology, Blood said.
Targeted Small Business IT Acquisitions
That realization touched off an acquisition binge that continues. Last year Dell acquired Boomi, for example, a company that provides Web-based services for integrating cloud-based applications with on-site systems.
Boomi exists "to make it easier for small and medium business owners to port from on-premise to cloud-based systems, Dithmer said. In other words, Boomi's technology does the work to make the applications a small business has installed on its servers integrate and play nicely with cloud-based applications.
Thats the dirty part of the process [of transitioning to the cloud] that nobody talks about, said Dithmer. Typically that transition can take up to a month or two. Boomis technology reduces the transition time to 2 to 5 days, Dithmer said.
Dell also acquired EqualLogic, a maker of small business storage array network (SAN) products. Kace, another 2010 acquisition, is a maker of systems management appliances, that among other things, automate the process of keeping software patched and up-to-date.
Kace has solved that [software maintenance], Blood said. Its a nice home run for a number of verticals, but its key for retailers.
Most recently, Dell announced its intention to acquire SecureWorks. SecureWorks does only managed security services for small and medium businesses, Dithmer notes. And Gartner ranks it as one of the best in the world next to IBM.
The acquisitions -- and there were others -- are an indication of Dells razor focus on helping SMBs address their pain points, Dithmer said.
The acquisitions also come, though, from a recognition that small business owners typically begin acquiring systems by deciding on software. If Dell wanted to own those customers, it realized, it would have to become a software and services provider as well.
IT Financing Options
Rounding out Dells pitch to SMBs is a range of financing options, an area where it has always been strong, because, as Dithmer said, Liquidity in small businesses and medium businesses is a huge issue.
So, does all of this mean Dell should be your small businesss new best friend?
It depends, in part, on how small your business is. Dithmer said Dell is targeting companies with from 10 to 500 employees, with the bulk in the sub-100 range. But the retail solutions, according to Blood, are aimed at those with 10 or more stores, which would seem to indicate a skew more to medium-size companies.
Dells Small Business Heroes
Will Dell conquer smaller companies? We asked some of the SMB heroes Dell addressed (and feted) at its Take Your Own Path (TYOP) event in December in Austin, Texas.
Pensions First Group, for example, is a UK-based start-up that provides Web-based risk management software to the global $20-trillion defined-pensions industry.
When it was still a small group of 12 entrepreneurs, PensionsFirst went looking for a major league IT partner to first help it figure out how it should build the IT infrastructure needed to run its business, and then help build it.
We started talking to three [companies], said chief technology officer Fiona Page. But it very, very quickly was short-listed down to Dell. They just had by far the most impressive approach to the kinds of problems we were trying to solve.
As importantly, Dell was respectful of PensionsFirsts aspirations. Right from the word go, they treated us the same, gave us the same kind of commitment as if we were a big multinational, Page said.
Dell provided the consulting PensionsFirst needed to chart its course technologically and opened up its labs in Limerick, Ireland -- facilities mainly designed to help enterprise customers -- to stress test the PensionsFirst proof-of-concept software and proposed Dell-based infrastructure.
Today, Dell provides the hardware in PensionsFirsts data center as well as also ongoing support and maintenance, including Dells proactive IT management services.
The relationship with Dell is not exclusive, but it has been crucial to the companys success, Page said. Sometimes [the Dell equipment] goes wrong, sometimes its delivered late. But in terms of the service provided, its very difficult for us to fault it.
Since its launch in 2007, PensionsFirst has taken off in the UK. Its customers have a combined total of £30 billion in liability (the amount a pension fund could end up having to pay out to pensioners). Its in discussions with another 150 companies representing about £150 billion in liabilities. And it recently opened a U.S. office in New York.
Warren Brown, president of Washington, DC-based Cakelove, another of Dells SMB heroes, had similar praise for the company. Cakelove is a trendy seven-store chain of artisanal cupcake bakeries in the DC area. Brown, a lawyer by training, launched it five years ago.
He had long been a user of Dell hardware, because of price and perceived reliability. When Dell took a shine to his company and offered him a complete technology makeover in return for public relations support, Brown jumped at the chance.
There has been the odd bump along the way -- a new point of sale (POS) system Dell proposed that couldnt, in the end, be adapted to Cakeloves business processes, for example -- but there have also been signal successes, including a cloud-based remote surveillance system, built with gear from Dell partner Digiop Technologies.
The system includes two to three video cameras in every store, with video fed to a cloud-based server. Brown and his managers can arrange multiple feeds on their screens to see whats going on in the stores. Its no substitute for being in the store yourself, he said, but it comes a close second.
The system helps him be sure employees arent goofing off, or spending too much time on visits from family and friends, but more importantly, it helps determine when hes over-staffed and could let employees go home, and when hes getting dangerously low on cake ingredients -- or has too much.
It saves time, Brown said. It saves payroll. I save myself some trips. And it gives me this kind of intangible sense of security, of reassurance, because I have an eye in the sky. He figures the system would pay for itself in a year to a year-and-a-half -- if he was paying for it.
Dell acted as general contractor on the project, sourced equipment and software from Digiop and subcontracted the installation work.
So, will Dell conquer small businesses? The answer appears to be a resounding yes, and it has a lot more to offer its conquests than small business notebooks and PCs.
Gerry Blackwell is a freelance technology writer based in London, Canada. Read his blog,
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