As we all know Michael Dell wants to take the company private so he can re-focus the business away from selling PCs to services. With commoditisation, intense competition and falling margins the hardware business, particularly PCs, is a tough one.
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Dell has been talking services for a few years now and this blog has written quite a bit about it (see links below.) But with Dell shareholders about to vote on Michael Dell’s offer to take the company private now could be the eve of a services revolution at the company.
I met up with dell services’ EMEA head, US head and the UK sales head yesterday to get a bit more details about the company’ strategy in the UK. The first thing of interest is that the new EMEA head Eric Clark was with HP before joining. He was an EDS man, as was the US head Kevin Jones who was also at the meeting. I also met the UK sales director Tim Loake.
In the EMEA region Dell Services is in 31 countries. Globally services accounts for 55,000 of Dell’s total staff of 130,000.
Since Dell acquired Perot systems in 2009 for $3.9bn I have been watching closely. It is difficult to take large hardware vendors seriously when getting into services after the debacle that was and still is HP’s take-over of EDS.
But Dell sounds like it has a plan. Its approach will not be the traditional one where an outsourcer offers to do the same thing as the customer but for less money. Rather it is going to focus of transformational IT. I must admit many of my contacts are sceptical about Dell’s chances but if Michael Dell and his investment partners get what they want there is surely a place for Dell at the top table. Dell’s recruitment of former EDS executives will give its services arm the expertise it needs to provide services and it recently named former Wipro senior executive Suresh Vaswani as global head of Dell Services is a sign that it means business.
So Dell Services now utilizes many acquisitions blended into its traditional end user managed services. For example Perot Systems gives it IP in the healthcare and government sectors. This IP is important to Dell Services aim to win business in what it describes as the mid-sized public sector. This includes local government, NHS trusts and the police
It is interesting because Dell is a technology company rather than a services company by heritage it has IP that can support its transmormational services. For example through the acquisition of Make and Clerity it has tools to make it easier to modernize applications. Most big businesses are heavily dependent on mainframes so moving these to Linux is an area Dell Services is targeting, with the Make and Clerity tools used to do this.
But there is no point focusing on services if you are to get low margins through large deals to take on a customers’ ‘mess for less’ as they say.
UK sales head Tim Loake told me that Dell Services will not necessarily rebid for tenders with existing customers if the customer does not want to continue transforming.
To show its diversity it has recently won deals with TUI Travel case study , the Scottish Fire service, the Singapore Stock Exchange and prto vides cloud services to community healthcare provider, Locala Community Partnerships.
See these posts I have written about Dell Services on this blog: