Techaisle Take – HPE vs Dell SMB IT solution stack

Comparing Dell and HPE offerings and ecosystems against the Techaisle SMB IT solution stack model

Techaisle’s latest report is designed to help SMB buyers and suppliers identify IT stack requirements, and to compare the offerings and ecosystems of the two current market leaders, Dell and HPE, against Techaisle’s definition of essential SMB & midmarket business technologies. The report is structured in three parts:

• The IT stack: the report begins by outlining the technologies that SMBs require – and require integration across – in order to support current and emerging business requirements
• Vendor comparison: an evaluation of Dell and HPE offerings, including core products, non-core products and partner-delivered capabilities, against the stack requirements
• Evaluating stack suppliers: advice on how to use the stack comparison, and additional Techaisle research findings, to evaluate Dell and HPE strengths

Please note that this report is specifically focused on IT requirements of small and midmarket businesses (1-999 employees) and does not cover consumer or enterprise requirements. The comparison includes only Dell and HPE and does not consider other suppliers.

Small and midmarket businesses are defined as:

• Small business: Businesses with 1-99 employees, which can be further segmented by e-size bands – for example, very small businesses with 1-19 employees, small businesses with 20-49 employees or 50-99 employees
• Midmarket: Businesses with 100-999 employees, which can be further subdivided into three groups: 100-249 employees (small midmarket), 250-499 employees (midmarket), 500-999 employees (near enterprise)

It is clear from the research that Dell and HPE have broad and deep portfolios, capable of meeting many of an SMB’s IT requirements. It’s also true, though, that none of them can meet all IT needs. Vendors need to manage inputs to their supply chains; they have to ensure that they can seamlessly support needed third-party applications; and they need to work with consultants, integrators, distributors, VARs and other resellers to ensure that their products are available and supported across the practically-unlimited spectrum of locations, industries and internal sophistication levels occupied by SMBs.

Dell and HPE have done a laudable job of establishing comprehensive SMB IT stack portfolios and are positioned for success as primary/single-source suppliers to the SMB market – but Techaisle urges all parties to ensure that they have both extended the portfolio into all appropriate cells within the model and ‘wrapped’ their offerings with the management attributes that are needed to translate potential acceptance into the long-term relationships that underpin sustainable market leadership.

Understanding buyer preferences: single source vs. multi-source

The question of whether an IT buyer benefits most from a strategy of working with a single or primary supplier responsible for integration and management of all resources, or whether it is better to procure individual components, systems and services from a larger group of ‘best of breed’ suppliers, is nearly as old as IT itself. The question is especially important to SMBs, which generally have limited internal resources, and would benefit from third party integration and streamlined procurement processes. It has historically been the case that many SMBs, and especially, many small and very small businesses, purchase based on immediate needs and current pricing, and as a result, end up with a mix of technologies and suppliers, but even in these segments, Techaisle has observed a trend towards a more holistic procurement strategy as small businesses encounter increasing requirements for cross-product integration supporting digital business practices and develop greater appreciation for the value of a trusted technology advisor.

On the supply side, the single vs. multi-source question is of great importance to vendors on both sides of the issue: those that are looking to establish themselves as single-source suppliers and/or ecosystem leaders are looking for ways to build preference for their IT stack definitions and the products that they offer, and those that benefit from multi-source procurement need to understand where and how they should engage with prospective customers based on the client’s propensity to pursue a best-of-breed rather than single-source strategy.

Products, services or both?

As part of the preparation for this IT stack analysis, Techaisle conducted both quantitative survey and in-depth interviews (IDIs) – qualitative discussions with SMB decision makers - to develop a deeper understanding of key issues. The most interesting aspect of the depth interviews, wasn’t the split of opinions but the content of the answers:

• In favor of a single supplier: believe that a single committed supplier will be best at understanding requirements and at fitting technology to business needs
• Wary of a single supplier: worried about the breadth of a supplier’s product portfolio, but mostly, about the breadth of services available from a single supplier
• Neutral: general agreement that internal costs would be reduced and might work better for less established environments that lack evaluation and integration skills

Taken as a whole, the commentary from those in favor of a single supplier strategy, e.g. HPE or Dell, those wary of it, and those who are neutral on the issue highlight three vendor imperatives:

1. Breadth of product portfolio matters
2. Services matter
3. Economics matter

“Us” power

Regardless of the tepid enthusiasm for portfolio-based approaches within SMBs and midmarket firms, there’s little doubt that Dell and HPE (and for that matter other IT suppliers), with the broadest, deepest and most robust portfolios will need to rely on third parties to address niche customer requirements.

Some of the third-party collaboration will occur within the SMB IT stack as defined by Techaisle. The report highlights areas where both Dell and HPE rely on partnerships to flesh out core infrastructure offerings. The IDI input (depth interviews) quoted above establishes that SMBs who are opposed to single-source relationships often object because they know that the range of software and services that they require – and the rate at which these requirements are changing – are beyond the internal delivery scope of even the largest vendors. The message here is clear: if a vendor wants to be established as a single source, it will need to develop and actually manage an ecosystem capable of addressing specific customer needs that extend beyond the scope of the vendor’s branded offerings.