Last August, when we looked at Dell’s Data Center Solutions group’s engineering strategy to raise operational temperatures, we knew this business unit warranted a second look. In Feb 2012, Dell announced full fiscal year revenues of $62.1 billion, which included enterprise solutions and services revenues of $18.6 billion. Solutions and services as a business group has consistently grown faster than Dell’s two other business units; desktop and notebooks and software and peripherals. Specifically, services revenue grew 12 percent to $2.2 billion. Transactional services business increased 14 percent with strong attach rates of Dell premium support services and its outsourcing business grew 8% and Dell claims services backlog of $15.5 billion.

When looking at services players, we  Our assessment of operations services providers includes review of:

  1. Intention – evidence of management intention to be involved in their customers’ operational success
  2. Availability – the manner in which options are packaged into solid solutions that empower customers’ need for continuos operations
  3. Resource allocation – ensuring appropriate bandwidth to satisfy customers cost effectively is critical.
  4. Advice – continuous improvement necessary to enable the inevitable ‘more for less’ mandate.

Dell’s Services and Solutions Group is organised to develop, define and support the deliver of offerings that are taken to market by its segment, services or domain sales teams:

  • offerings function covers portfolio strategy, develops new and sustains existing offers and ensures end user support & tools currency
  • solutions team looks at overall services strategy, drives scope, develops and manages solutions services and arbitrates cross-services priorities
  • infrastructure resources ensure delivery through a range of programmes including solution integration, validation, certification, cloud engineering, workforce planning. This team is also responsible for Dell Solution Centers, services engineering, IT systems and processes and services transformation.

The full range of Dell’s services portfolio is here. As we prepare for our storage virtualization study, we were more interested in trends Dell has seen in storage related services. Storage has been a source of significant growth for Dell, mostly on the heels of acquisitions such as Compellent in December 2010, Ocarina Networks in July 2010, Exanet in February 2010, The Nteworked Storage Company in February 2008 and EquaLogic in January 2008. By introducing customers to a more comprehensive range of support options and services, Dell and its partners stand to increase share of wallet with their installed base of customers. The most popular service to date has been ProSupport with mission critical options, followed closely by IT Advisory Services.

With the IT Advisory Service, customers have a designated Dell IT professional called the technical account manager (TAM) who provides pro-active health checks, monitoring services and recommendations. Storage customers are becoming increasingly concerned about performance and utilisation, often looking to virtualisation as part of their arsenal. Dell’s TAMs have access to a large and growing database of performance metrics that allow them to customise reports for each customers across 20 critical parameters. Comparisons are possible against an aggregated group of similar companies so that other customers’ confidentiality is respected.

As with the rest of the market, Dell competes for skilled and experienced storage and data management professionals. Its investments in storage services today include 800 storage development engineers, 1,200+ storage services consulting and delivery resources and 600 storage sales specialists. These professionals are supported by 11 solution centers, 10 datacenters and 5 R&D centres. Global solution centres are a safe environment for customers to experiment, evaluate reference architectures, walk through proofs-of-concept and generally get comfortable before finalising scope, or deployment.

Dell’s progress in services is praiseworthy. It inherited multiple capabilities and cultures from the various acquisitions and has implemented a clearly defined process for maintaining its services portfolio and delivery capability. Dell’s services challenge remains in marketing from within a predominantly hardware brand. This is a common challenge faced by services business within larger non-services companies. Corporate marketing resources and roadmaps tend to be geared towards manufacturing life cycles, and must be re-aligned to handle faster-paced services development cycles.

Image credit: Fields of Gold by Allard Schager

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