Dell has been hitting the headlines with concerns for the firm’s future. As the current CEO Michael Dell tries to reprivatise the company and fend off competition from other stakeholders who want control, it saw desktop and mobile revenues plummet 20% and overall sales fall 11% in the fourth quarter (Q4) of 2012.
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Yet, there is one area of the business that has continued to keep its chin up. Dell Networking saw revenues up 18% in the last quarter, marking the 13th consecutive period of growth for the servers, storage and networking division.
As the figures rise, Dell has invested in more staff to keep the momentum high for the relatively new focus of enterprise – a different approach for a company so heavily reliant on sales of consumer PCs.
Following the appointment of ex-Cisco lead Dario Zamarian almost three years ago to lead the global networking business, now it is looking to its European operations and has brought former Huawei and Cisco executive Dominique Vanhamme onboard to become the head of networking for the European, Middle East and Africa (EMEA) region.
“Dell might be new to the enterprise, but it’s not new to networking,” he told Computer Weekly. “It is about bringing it to the next level.”
But what made him leave a more traditional networking supplier to play for a team with a relatively small market share and little public perception as a networking company?
“For me, when I found out about the role at the end of the year, it was the willingness to apply the velocity of Dell to the network and enterprise solutions movement that excited me,” says Vanhamme.
Dell might be new to the enterprise but it’s not new to networking
Dominique Vanhamme, head of networking EMEA, Dell
“Remember, Dell has made 17 acquisitions since 2010 to really develop a complete portfolio for enterprise, not just hardware. Dell has had a network offering with a few firsts of its own from its research and development, but with the addition of these acquisitions on top, from security to network management, the portfolio is [stronger].”
Budgets are still tight though and enticing the enterprise customer into investing into new network infrastructure can be tough at the best of times, let alone when the money might now be there.
Yet, Vanhamme believes the technical capabilities that have come to the foreground in recent years will be enough to drive businesses to the checkout.
“The strong undercurrent in networking has that technology has been relatively stable since 2008,” he says.
“However, in recent months trends have begun to change that. Take 10GB or 40GB connections. It might sound silly, but it is the first time since the early 2000s we have had a new speed to help consolidate in the datacentre. It appeals to storage, networking and servers, bringing all those islands into one. The technology is now mature from that perspective.”
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Where Vanhamme’s real enthusiasm seems to shine though is the idea of network virtualisation.
“We would like to do for networking what VMware did for the server,” he says.
“Virtualisation is changing the landscape and is a key investment area for us. In the datacentre, it is really critical, but not just for the server. We want to come in there with our own innovation.”
There is no doubt network virtualisation plays a huge role in the move towards the current buzzword technology – software defined networking (SDN) – but Vanhamme was keen to point out Dell’s virtualisation solutions were here now and SDN was still some way off.
“It is a piece of SDN, which is an important movement thanks to the establishing of standards, like OpenFlow,” says Vanhamme. “Dell is participating in SDN standards groups too. But right now it is important to deploy infrastructure and not wait for SDN to come of age.”
Dell’s solution is Active Infrastructure – a family of storage, server and networking products, along with management tools, that create a single virtualised environment for a business.
“Yes, it is compliant with SDN, making it a solid investment in the long term, but compared with current systems, it has a more elegant design,” says Vanhamme. “Legacy architecture in the datacentre was multilayered and cumbersome. With virtualisation, you can make it a flat network and improve latency and manageability.”
We would like to do for networking what VMware did for the server
“Workloads and traffic have really changed in recent times. It is much more about server-to-server communications now. It used to be about clients accessing servers or server farms as we called them, now it is application-to-application between servers.”
But in an age of austerity, is this a convincing enough case to get customers to invest into Dell’s hardware rather than keeping their existing, established network infrastructure from their existing, established network suppliers?
“There are compelling reasons to embrace this technology, but not to replace technology for the sake of it,” he says. “There is a need for optimising as the network has become too complex over time. We need to have it very simple, automated, and this is what is compelling our customers.”
“There is also the form factor impact, where we can provide improved power consumption, giving one-sixth of the footprint at a lower cost. With pressure on budget, you can’t just rip and replace, but these are real savings.”
The numbers in this area are looking good for Dell. As well as the 18% revenue rise, Vanhamme told us Dell Networking alone was signing up 500 new customers every quarter, around the world.
“This is because we are using what technology offers now, but efficiently and with costs savings,” he adds.
Vanhamme is modest and admits it is only “the start of the journey for Dell,” but with its current predicament, the current crop of executives must be grateful one area is performing well. Let’s see if it can keep the momentum.