Techaisle Blog

In a very interesting move, Apple announced that they would invest in returning some production to the US. At first blush, this seems like a bold tactic  which will certainly improve Apple’s brand reputation in the wake of long-standing criticism for moving skilled manufacturing jobs to China, where worker pay and conditions are bad enough to drive some to suicide. And as the number one technology company in the world it is also heartening to see some jobs come back home, but there are a few caveats:

The Apple MacBook is the top of the line notebook with a premium price point, out of reach for most small businesses unless there is strong justification, such as for professional designers and developers who need to pay double that of a similarly equipped Wintel device to do their work effectively. That share of the market has always been small relative to Wintel machines, both desktop and notebook. Apple manufactured Macs in the US until the mid-nineties, after most competitors had moved production offshore. The caveats include 1) whether this experiment will grow to the more strategic iPhone and iPad product lines, and obviously, 2) whether Apple can turn a profit that makes the decision stick after the first $100M is spent.

Apple cites the inability to find the level of skills and manufacturing equipment in the US to be able to turn out production rapidly and with high quality. No doubt Foxxconn, Apple’s Chinese production partner, who already operates some plants in the US, will be looking to expand operations here. They had issues ramping up production to meet demand for the new iPhone and there were hiccups, followed by reports of Foxxconn negotiating multi-billion dollar deals in Brazil, to manufacture there. Regardless of how that materializes, today’s announcement will dampen some criticism that would accompany the final press releases from Sao Paolo.

Enter the Dragon

Another reason this makes sense to us is that China’s technology vendors are on the rise – no surprise there. But consider that within 7 years of buying the ThinkPad brand and manufacturing rights, Lenovo has become the #1 PC vendor in the world in unit shipments, (#1 by Gartner, #2 by IDC) squeezing 10% out of the global share in a stagnant market in the last few years alone while jumping to 30% share in China, 3X the nearest competitor.  It was also announced today by Reuters that Apple fell to #6 in the Chinese smartphone market, which is growing in leaps and bounds to 60M units per quarter, with intense domestic competition and Samsung leading the pack. Lenovo is number 2 in the smartphone market as well as having the overwhelming first place position in PCs mentioned earlier, #5 smartphone seller Huawei, is gobbling up global market share in the telecom equipment market at an alarming rate.

We have written several times about the rising competition from China in the hardware manufacturing end of the IT market, and of its’ growing importance as the second largest PC, and largest Smartphone market in the world, with a billion users and 60 million units sold per quarter. As shared with our readers in a September article about Internet adoption and managed economies, China and Korea have many similarities that make for a reasonable scenario of things to come. Take it from someone who lived 15 years in Asia and has been watching Korea for 30 – the voracious appetite for material wealth, pragmatic style of government and East Asian capitalism will leave no stone unturned. Take Samsung for example: between 1990 and now they have become the number one maker of TVs in the world, starting from scratch and displacing the Japanese faster than they displaced American manufacturers, #1 in memory chips and some other semiconductors, #1 in Smartphone handsets (almost double Apple in unit shipments), a global leadership position in screen technology, squeezing Sharp, Toshiba and others for the keys to the future standard, and a global frontrunner in CE and white goods. These guys are US Steel in their heyday. And they are a major supplier to Apple for the most important products. And the legal battles are not over yet, according to this CNET News video. They have Foxxconn on the left and Samsung on the right. With friends like these who needs enemies?



CNET on Samsung Apple Lawsuit.

Strategically Apple’s move is understandable, at least from the outside looking in. Steve Jobs’ genius for aesthetic design, usability and commitment to quality helped create the PC revolution, arguably the single most important technological advance aside from the Internet since the Industrial Revolution. It also got him ousted from Apple as decisions about long term architecture were made. Although Apple always had (and still has) a very loyal following in the computing arena, they did not gain more than 10-12% market share from 1980 to 2000. This meant that Apple had to drive enough margin to support R&D for operating systems, a proprietary microprocessor, end user applications and non-standard chassis and other components.  By contrast, the rest of the PC market leveraged standards and Scale Economies as investments were diffused in the market. The Microsoft standard OS and a maturing suite of interoperable applications were the lynchpin of the ecosystem and resulted in hundreds of companies joining the competitive fray. White box and private label manufacturers sprang up everywhere, eventually producing branded competitors like Dell and Compaq who were selling practically as fast as they could produce. By 1996 Apple was being counted out by many analysts as an also-ran. Eventually in 1997, Jobs was brought back in to save the company, which was considered a very risky personal move at the time.

In his second stint as CEO, Jobs turned Apple around and helped solve a problem that almost put the recording industry into insolvency; how to make money in the music business when new technologies allowed free files to be distributed at will and pirated on a global scale. Apple introduced iTunes in conjunction with EMI, and solved the Digital Rights Management issue. Under Jobs they had to kowtow to Redmond and adopt compatible MS Office Application Suites, which were not interoperable to that point – no swapping files between Apple and Microsoft users, and move to an Intel architecture. Despite several earlier failures, such as the Newton, Apple achieved a breakout hit with the iPod, and iTunes began printing money. Next came the iPhone, which almost immediately become the third largest handset brand in the market, followed by iPad in 2010, and several versions of iPhones. The products have produced a ravenous worldwide customer base and made Apple the most valuable (tech) company in history with a half-trillion dollar war chest.

The point is that Apple’s meteoric rise is more a function of the transition to CE and Smartphones than its’ leadership in computing and now they are in a bind; they are stretching their existing supply chain, they rely on advanced manufacturing resources and skilled labor that have been developed offshore, their largest potential market (China) is controlled by arch-rival Samsung, with whom they are in a nasty legal battle and depend on for key components. Prepare to Repel Boarders.

Next Chapter in the Bits vs. Atoms Saga

Apple’s success with iTunes came as a result of a property of the Internet that is now at the root of their problem: value moves at the speed of light when it can be digitized, and even when that value is in the form of an optimized supply chain, there are physical limits imposed by materials and the movement of products that ultimately make manufacturing a challenging business. On one hand you have companies like Apple, who source, manufacture, sell and distribute 125 million smartphones, along with millions of other devices. On the other hand there are companies like Google, whose value can be delivered over a network, relying on increasingly large server farms and unfettered access to electricity, but with much less need for operational infrastructure. Cisco and Oracle are another example although not as stark. Huawei is exerting substantial pressure on US firms as a global competitor and causing Congressional sabre rattling, as we noted here.  Telecom equipment has been a hardware-oriented business but is less at risk because of innovation toward software and network integration – moving toward bits and away from atoms, demonstrated by Cisco's recent alliance with Citrix. Earlier we discussed Lenovo, which has overtaken first Dell and now HP and is the global leader in PC unit shipments.

As noted, we think moving some manufacturing back to the US will bring some benefits, not least of which is the PR value of bringing some jobs back home. It is slightly diluted by the fact that production of the most important product lines will not be possible for some time to come and does not decrease reliance on Foxxconn or really help with the Samsung conundrum. However if the experiment succeeds and a profitable advanced manufacturing sector can be developed and others follow suit it will be a very good thing for all of us in the technology industry.

Solution for End-to-End Lead-to-Cash Workflow

As part of our Pick of the Week series, we requested an online demonstration of what sounded to be too easy, and were privy to a demo of Dell’s DCBA (Dell Cloud Business Applications) to see the lead to cash process from building customer awareness to sales contract. We were impressed at how far the industry, and Dell, has come in the last few years at solving the practical challenges around marketing and sales integration. Dell is providing enterprise-level CRM capabilities to SMBs that might have run into seven figures (and a year-long implementation) only 10 years ago. And going even further by tying all this front-office activity together with accounting to synchronize invoicing and billing into the process, insuring that sales staff can be paid without spending 12 hours a week updating their CRM records, and Finance does not have to chase down account managers for collections and accounts receivable updates on the 29^th of every month.

Small and Mid-Market Companies Choose Online CRM as the Shortest Path to Revenue



The killer Enterprise Application to emerge at the end of the Client/Server era was CRM, which spawned a huge ecosystem of sales process, configuration and customization experts. The next step was online CRM solutions led by Salesforce.com, a true multi-tenant architecture and Cloud ecosystem in and of itself. The ample supply of CRM expertise, along with the market needs to generate revenue as quickly as possible resulted in a wave of online CRM start ups and then pure-play Marketing Automation vendors that were eager to plug into the accelerating number of customers opting for a services model.

 

Falling Through the Cracks

Even with the best CRM software and a lot of customization, even for those who spent the most on these systems, and especially large organizations, getting to a state of accurate and current information has always been a challenge. The perpetrators tend to be too many steps in the process, unclear roles and responsibilities, limitations in the software that force workarounds, ineffective hand-off of customer relationships, different levels of process and software maturity, and many others. Much of this was caused by contention for capital budgets, the complexity and expense of internal systems integration and never being able to get ahead of the technology curve, resulting in a large percentage of CRM implementations failing outright. Properly selected and integrated Cloud-based Applications like this one from Dell have already gone a long way to eliminate many of these challenges by offering a shared customer database approach from the very beginning.



 

Following the image above, it is quickly apparent that the demand and supply cycles are covered by this approach: Lead to Opportunity, to Proposal, to Customer Support, which is good for the customer. The internal operational cycle is also enabled from Marketing to Sales to Invoicing and Billing, to Customer Service, which makes life a lot easier for everyone involved.

The demonstration was recorded and we have included relevant excerpts that follow the process. Dell offers Pardot, a leading Marketing Automation Solution for marketing which connects automatically to Salesforce.com by synchronizing User-IDs from each component, in less than a minute. Sales Funnel, Alerts, Dashboard, Forecast are coordinated out-of-the-box, and rules are customizable between the applications.

Next comes Conga, which merges customer information, selected products and services, proposal template and cover letter into a print-ready quotation that shares all data with the appropriate customer and pipeline records.

EchoSign, an e-Signature solution from Adobe follows, allowing the customer to authorize the order securely and purchase immediately, which is always a good thing in Sales.

The next part of the solution solves the ever-present issue of ensuring the Sales and Accounting Systems contain and report the same information. This is accomplished using the process integration presented below:

 



Dell SMB Lead to Cash Process Automation 1 from Techaisle on Vimeo.

 

As shown in the image, the same information that is incrementally collected throughout the marketing and sales process is used to auto-populate the agreement, invoice and collections data within the accounting package, for our demo, this was done using QuickBooks Online, one of several pre-configured packaged integrations that do not require manual intervention except for company-specific policies and table structures.

Again, seeing it is more impressive than reading about it:



Dell SMB Lead to Cash Process Automation 2 from Techaisle on Vimeo.

What was the name of your company again?

The benefits of sharing information between Marketing, Sales and Accounting are equally or more important with Customer Service, which is the lifeblood of all companies’ online reputation these days. Taking the data one step further into customer service affords the advantage of having the full customer history at your fingertips while fielding support calls – which provides a higher level of satisfaction and smarter service capabilities.

 



Dell SMB Lead to Cash Process Automation 3 from Techaisle on Vimeo.

 

Why this is Important

This is important because it goes back to some basic principles that improve information system management, including:

Move Data, don’t type it more than once. Whether using drop downs to input categories and exact descriptions or whole sections of records or groups of records, moving data will result in fewer errors than typing it into the system. In addition to the accuracy this offers, it eliminates a lot of the drudgery associated with maintaining CRM systems and allows sales people to get back to selling.

Build Information Incrementally. Capturing the same data repeatedly will annoy customers and staff, records should be built up over time and sections of data moved to populate application modules as they are brought online. Dell’s solution does this through progressive web forms for customer records and by sharing data between marketing, sales, accounting and customer service.

Centralize Data. Trying to manage multiple customer databases is confusing, inefficient and causes a lot of frustration. Accuracy, Consistency, Reliability and Timeless are hallmarks of data quality and all suffer from running disparate databases of the same information. While data tends to take on a life of its’ own with volume and increased usage, starting with a design that shares information between systems will eliminate problems down the line and can actually give Small and Mid-Market businessesan advantage over Enterprise customers who have been wrestling with huge CRM database and internal IT for the past 15 years.     

Keep it Simple, Get Going Fast. In a recent survey 77% of SMB complained that even there has been a lot of progress in the past few years, complexity managing IT has grown faster than the problems it is designed to eliminate. SMBs want to spend money on revenue generating activities and reducing costs, which means focus on the core business, not hiring people to manage IT adoption that cannot stay engaged full time on building the business. We were surprised at how easily this whole integrated solution came online, easy enough for a power user to manage and available to use in a matter of days, quicker for those who are familiar with CRM systems.  The Dell solution comes with fixed fee, fixed scope implementation services for all of the applications they sell, making it easy for SMBs to get going quickly with a single vendor for support.

The Bottom Line

Dell’s DCBA solution was announced last September and has come a long way since introduction. In this example the demo provisioned a new account without need for any coding; userIDs tied Sales and Marketing together.  Customers signed the necessary paperwork and and Invoicing data was moved automatically once the new account was opened in QuickBooks. For small and medium sized organizations, finding ways to make best use of their IT investments-- to streamline their sales processes, as in this example here, can be the path to increased sales and help them realize greater business success, and is certainly much easier and cost effective than it used to be.

 

In a small gathering of analysts and media , Dell showcased and unveiled its latest end-to-end desktop virtualization capabilities. The announcement was carefully crafted to time with the VMworld event being held in San Francisco next week. During the entire two hour “Chalk Talk” by Dell team, SMB was mentioned only three times and mid-market design point (Dell’s new mantra unfolded at its analyst event earlier in the year) was never mentioned at all. However, the importance, urgency, messaging and relevancy were clear and precise.

The announcements included Dell EqualLogic intelligent datacenter storage arrays with SSD tier & spinning media, Dell Wyse zero clients, and Dell DVS Enterprise reference architectures including vStart for VDI Reference Architecture – VMware View, Dell Mobile Clinical Computing - VMware AlwaysOn Point of Care™ Reference Architecture and New Dell DVS Enterprise –VMware Mobile Secure Desktop Reference Architecture.

Simplified, Manageable, Secure End-to-End Desktop Virtualization solution that SMBs will appreciate

Kicking off the discussions, Rafael Colorado, Marketing Director, Dell Desktop Virtualization Solutions, said, “Customers have to face complexity and try to implement desktop virtualization themselves and get stuck. Dell is trying to isolate components that create complexity”. The statement summarizes the technology pain-point being experienced by SMBs in adopting emerging technologies. Techaisle’s July 2012 survey of 3300 SMBs in US, UK, Germany found that 72 percent of SMBs want vendors to simplify technology and 61 percent are ignoring some technologies because they are finding the decision making to be too complex.

Hence, simplification in any form will be a step in the right direction. The same survey also showed that Virtualization is among the Top 5 relevant technologies for SMBs but is also among the Top 5 technologies most complex to understand. Dell is serving up simplification in the form of single SKU, an end-to-end virtualization solution that is manageable, secure, innovative, and intelligent and with one contact phone number. vStart for VDI Reference Architecture – VMware View runs as a workload on top of the Dell vStart stack, offering flexibility and efficiency enabling the organization to focus on driving enhanced business agility and delivering IT assets – rather than building an infrastructure. vStart for VDI 50 is already available from Dell for no-stress SMB deployments. The vStart for VDI 50, is a pre-configured solution for SMBs scaling from sub-100 up to 250 users per system and vStart for VDI 1000 for businesses that scales from 1000 up to 1,000 – 4, 000 users per system. In fact, Techaisle’s SMB VDI Adoption and Trends study shows that of all the SMBs planning to deploy VDI, 37 percent will have between 20 to 50 users.

Drivers of SMB Desktop Virtualization adoption and Dell’s solution components

The drivers of desktop virtualization are many, but the top five as mentioned in recent Techaisle survey of 1200 SMBs in the US are:

SMBs are planning to use VDI to reduce costs, better disaster recovery, and access of applications from anywhere and on any device in a secure infrastructure. Reduction in costs and better disaster recovery are considered to be inherent outcomes of virtualization deployments.

Dell EqualLogic Intelligent Data Center Storage Solution

Dell EqualLogic new storage arrays (available in Q4) are its densest hybrid storage arrays for tiered I/O in a single appliance. Through built-in auto-tiering algorithms, it creates automatic load balancing and puts out the most frequently used data on SSDs thereby “providing 360 percent improvement in array access and 75 percent reduction in latency lowering the manageability for desktop virtualization deployments”.  For a mid-market business, and specifically for verticals such as healthcare, financial services and even manufacturing these would be of great advantage. The solution component helps in cost reduction and application availability (1 and 2 above in chart).

Dell Wyse Zero Clients

Dell Wyse zero clients P25 and P45 designed specifically for VMware View implementations provides better manageability, security and mobile access to data and applications. The P25 uses Tera 2 processor and can move 50 million pixels to the screen. It supports Ethernet, wireless and fiber unlike other zero clients. The P25 can support 1920 x 1280-pxiel resolution for two displays or 2560 x 1600-pixel resolution for one display. The P45 can be used to support up to four displays. The solution component helps in application availability, mobile access and secure data (3, 4 and 5 above in chart).

Dell DVS Enterprise - VMware Mobile Secure Desktop and Dell Mobile Clinical Computing - VMware AlwaysOn Point of Care™ Reference Architectures

Dell and VMware have also jointly validated the Dell Mobile Clinical Computing for VMware AlwaysOn Point of Care™ offering with VMware View. Powered by Dell’s Mobile Clinical Computing solution, this architectural design incorporates a number of features to ensure data integrity as well as minimal disruption in computing service to the caregiver, including: constant monitoring, secure rapid access, single sign on and constant data replication across sites. With this validated architectural design, healthcare organizations now have unparalleled desktop and application reliability and availability – and secure rapid access from virtually any device.

Conclusion

SMBs are quickly recognizing the need to adopt virtualization within their businesses, however, they also find it complex to understand and implement. Complexity comes from inherent questions SMBs ask themselves and their advisors: What can virtualization do for us? Which virtualization technology is best for us? How should we implement it so that we get the most benefits in the shortest period of time? Who can help us implement it? Nevertheless as per Techaisle research, VDI market in the US alone will be US$588 million in 2016 growing at 41 percent CAGR.

Most SMBs rely on their local channel partners for maintenance & management of their IT infrastructure as well as for advice on new IT purchases. Therefore, Dell created a new Desktop Virtualization Solution competency based on feedback from  its network of 100,000 channel partners to provide them appropriate training and skills to sell and manage VDI for their local SMB customers.

In the meantime, with its latest desktop virtualization offerings Dell is continuing to execute on its vision of an end-to-end, best-of-breed solutions company.

Anurag Agrawal
Techaisle

Dell (Power to Do More) is buying Quest Software (Simplicity at Work) for US$2.4B, its second largest acquisition after Perot Systems. Combining power and simplicity is not easy to achieve but is a potent combination if done successfully. And throwing Wyse and SonicWALL in the mix can lead to a catalytic reaction in the right direction that may become hard to contain and beat. It is all in the execution, messaging and channel commitment.

A lot has already been written about how the Quest acquisition is a brilliant move by Dell to augment its software portfolio and complete its end-to-end solutions offerings from PC hardware, servers to security, storage, software, datacenters and integrated datacenters. It is not important to know, understand, praise or fault Dell for how vWorkspace will fit into its partnership with Citrix or VMware, or how Quest’s Identity management will be combined with SonicWALL or how Dell will address Windows migration with Quest tools and on, and on. What is important to understand is that Dell is demonstrating its steady and unflinching commitment to be an end-to-end solutions company for enterprises, SMBs, government and education segments.  Dell gets it.

Following the announcements we had the opportunity to speak with senior executives at two of Quest’s partners, dinCloud and En Pointe Technologies; Ali Din, Senior Vice President and CMO, dinCloud and Naveed Khan, Director, Vendor Management at En Pointe. dinCloud provides hosted desktop and server services and En Pointe is a Quest software VAR. On one hand, dinCloud is eager to start a relationship with Dell, whereas on the other, En Pointe, already a Premier partner of Dell has had some preliminary discussions with Dell. They are at two spectrums of the same light and both are excited about the opportunities that can be explored, exploited and consolidated with Dell as a vendor.

There was a common refrain of hope and aspiration from both dinCloud and En Pointe. Quest has lots of business units; most of the times these units and their products are not integrated with each other. The hope is that Dell will be able to assimilate and integrate the business units and products quickly. And both were unflinching in their commitment to Dell and for that matter even other vendor partnerships they have. Committed partners have the capacity to make the ‘power to do more’ and ‘simplicity at work’ even more noticeable. Combined Dell and Quest can solve big problems for IT with products and solutions that are simple to use.

Techaisle’s recent survey shows that 72 percent of SMBs agree that IT vendors should work towards simplifying technology. 54 percent also mention that their technology pain points have increased in the last 3 years and 44 percent agree that technology has become more complex to understand now as compared to 3 years ago. To these SMBs Dell may want so say, “we give you the power to do more combined with simplicity for your business”.

Anurag Agrawal
Techaisle
@anuragtechaisle