I’m not a big fan “top reasons to do x, or fix y” but I decided to go against my better judgment and publish three ways Dell can shake-up the industry.
One: BE DELL
Dell is a successful company that revolutionized IT by providing equal to superior products at a lower price while providing excellent customer support and service. Dell seized the opportunity to partner with companies like EMC to expand their footprint while continuing pushing costs down. Somewhere along the line, between AMD and Blade Servers, the competition caught-up and began to fight fire with fire. Meanwhile, Dell was left “Dell-less” and flat-footed; no longer nimble enough to change from the cha-cha to the tango.
Dell must make a critical choice; blaze their own path within this datacenter/cloud computing mess or follow HP, Cisco, and others. Currently, Dell has chosen the latter and has aggressively partnered with Juniper, Brocade, and others to attempt to match their rivals (similar to IBM’s strategy minus the power of IBM Global Services). Additionally, Dell continues to evangelize the concept of OPEN IT infrastructure. Ah, the old OPEN vs. Proprietary argument; does it hold water in the enterprise? Finally, Dell purchased Perot Systems as their long awaited entrance into services.
All these moves, while necessary, do not play to Dell’s core strengths. Why not use the vaunted Dell manufacturing capability to commoditize next generation hardware faster than the competition can recoup their costs; Cisco has spent millions on R&D and software development while HP has spent billions on R&D and acquiring complementary technology companies. If Dell could build a UCS-B/Nexus look alike with equal to superior performance at a lower price, then they could dominate the market.
Two: Public Clouds Need Not Apply
While the idea of public clouds is intellectually enticing, the reality is the money lies within private clouds. Does Google build their cloud infrastructure on commercial hardware from Dell, HP, IBM, etc.? By their very nature, public clouds are singular in nature; search, virtualization, CRM, etc. They require fine tuned operating systems and management capabilities that are linked to CPU, memory, power, and disk. In other words, go directly to the component manufacturers and build what you need. If something fails, weigh the cost of replacement vs. leaving it in place.
Private clouds require a delicate balance of performance, reliability, and management. Very few enterprises will entertain the notion of building their own hardware as they want the peace-of-mind and backing of giant corporations such as Dell. To capitalize on private clouds, Dell must blaze of new trail by concentrating on security, performance, reliability, management, and ROI.
How does Dell accomplish this? By calling BS on the current state of private clouds and offering real solutions to current challenges. How? Don’t just take tired old tools form 3rd party ISVs and announce that you have a cloud computing management strategy. Understand that cloud computing requires new paradigms within security, storage, networking, and compute power.
Three: Open Source Hardware
Open Source Hardware is a reactively obscure concept. Per Wikipedia, “Open Source Hardware is designed and offered in the same manner as free and open source software.” While HP Labs has dabbled within Open Source Hardware, Dell has the opportunity to take the lead.
Dell could offer a full line of Open Source Hardware publishing full hardware specifications as well as the software that runs these machines. Dell Laps and Open Source Division could work with customers to build cost effective systems. This is very similar to what they have done within their white label division; see Aster Data.
Wait, didn’t you say most customers won’t build their own hardware? Just because it is open source does not mean everyone will take advantage of this nor does it mean a lack of revenues; see Novell, Red Hat, etc. By publishing detailed specs and code, Dell becomes a revolutionary and IT professionals can finally make informed decisions. They may choose to have Dell build the systems, build them themselves, or purchase from a competitor. However, the thought leadership and vision comes from Dell
One area of low hanging fruit for Open Source Hardware seems to reside within storage. Rather than purchase expensive gear from EMC, IBM, etc. why not build a cost effective storage array? Of course, Dell would be cutting into their EMC partnership, but do they really want to work with a company that is dating Cisco?
In conclusion, I find Dell a fascinating company with explosive potential. Given the right vision and strategy, Dell could catapult ahead of the pack.