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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.

Dell announces On Demand, PowerOne, expands PCaaS, focuses on customer advocacy, invests in SMB

Dell was always been relevant for small business and education markets but is now in an exalted position to stake its claim within the enterprise segment and the new battleground – the midmarket firms. In this Techaisle Take analysis I cover Dell Technologies’ On Demand offering, Progress Made Real initiative, expanded PCaaS for SMBs, focus on customer advocacy, continued SMB investment, new converged infrastructure PowerOne, Unified workspace solution and channel partner strategy.

Dell Technologies Summit in Austin was a showcase of bold announcements and understated commitments to corporate social good and customer advocacy. Dell has certainly transformed in the last five years. It has moved along a path from a PC company to end-to-end solutions provider to a digital transformation partner to a place where it is driving its own transformation through the power of analytics with a goal of delivering customer success. Dell has catapulted itself into relevancy for the next decade.

In 1984, when Michael Dell founded his namesake company in his college dorm, I was a freshly minted engineering college graduate working through my first job at a tractor manufacturing plant in India. My first interaction with Dell was in early nineties when an India-based firm was awarded a contract manufacturing deal. I was then running the secretariat of a computer manufacturer’s association in India. Since then not only technology has progressed but both the consumers and commercial buyers have evolved. Dell has not only moved with the times but sometimes has been ahead of the curve. One such “ahead of the curve” initiative is “Progress Made Real for 2030” announced at the summit.

Progress Made Real for 2030 stands on four pillars:

  1. Advancing sustainability: for example, one-for-one recycling, that is, every product that Dell sells it will recycle an equivalent product
  2. Cultivating inclusion: committing to 50 percent of Dell workforce to comprise of women by 2030, 40 percent of managers of people will be women, 25 percent of US workforce will be Hispanic or African American
  3. Transforming lives: for example, Dell’s work with Tata Trusts, with a goal to reach 40m under-privileged people from the current 11m
  4. Upholding ethics and privacy

Enabled by a combination of pervasive use of technology and vastly-expanded solution options, the technology user and buyer community has become more diverse in both composition and focus. Business decision makers (BDMs) are not content to await IT’s blessing to pursue technology options that align with business needs: an increasingly tech-savvy business user/management community plays an ever-expanding role in assessing technology options, and even in specifying solutions and managing their rollout. At the same time, the solution options themselves have expanded to become more accessible to non-IT staff. Some technologies, such as analytics and IoT, directly address business management questions. Others, notably cloud, provide support and delivery options that give business units the option of avoiding IT oversight. Even core IT functions, such as storage management (especially with respect to Big Data) and security (particularly with regard to cloud and mobility) are reshaped by system requirements imposed by BDM needs. It is not out of place, as an analyst, to say that Dell has been a little late in recognizing and pursuing the shifting patterns. Regardless, Dell has been a believer of technology democratization and has begun a concerted effort to manage technology chaos with a differentiated customer strategy and drive the ability to scale human capacity. These are very lofty and moonshot initiatives. But then Dell is a founder-led company whose founder is skilled at assembling the proverbial ship piece-by-piece and navigating it through uncharted and occasionally choppy waters.

Dell Technologies differentiated customer strategy is built on four key points:

  1. Driving social impact with purpose-driven relationships
  2. Creating customer advocates for life by honoring customer loyalty and delivering success
  3. Making it easy to do business with Dell by executing on basics
  4. Unlocking customer value by leading with insights

Dell’s customer advocacy team is constantly analyzing 9.5K social conversations per day, looks at 33K customer verbatims in addition to its 16K sales team members sharing feedback. Dell’s plan to delivering a seamless and simplified customer experience is not very different from recently announced customer lifecycle experience, aka race track, by Cisco. End goals are the same, approaches are slightly different. But the fact that all suppliers are landing at the same end-state is significant on how the technology industry has evolved.

Perhaps the most important announcement at Dell Tech Summit was its On Demand offering. Dell went to great lengths to explain its genesis and development but it is clear that it a direct response to the growing popularity of HPE GreenLake. Regardless of HPE commanding the media-waves Dell has jumped headlong into the as-a-service, post-transactional market with Dell Technologies On Demand Autonomous Infrastructure available via DT Cloud. Dell is prepared to deliver solutions today and at scale. And it is also within reach of midmarket businesses. Key takeaways of Dell’s On Demand solutions are:

  1. On-demand, consumption-based and as-a-service solutions for on-prem infrastructure / services is customizable, integrated across the full-stack for Dell's end-to-end portfolio from edge to core to cloud
  2. Dell widened the product of their Flex On Demand offerings for PowerEdge servers and their new PowerOne autonomous converged infrastructure solution (announced at Dell Technologies Summit). With this announcement, Dell’s consumption-based on-demand solutions now cover PCs, servers, storage, CI/HCI, IoT, datacenters, networking and data protection. Ideally applicable for firms with a minimum $250K 3-year contract-value but end-points including PCaaS is available for SMBs (at lower committed contract values).
  3. Dell knows how to create simplicity within complexity. Businesses can customize and select their on-demand path from:
    1. Payment: Pay As You Grow, Flex On Demand, Data Center Utility
    2. Services: ProSupport, ProDeploy, Managed services
    3. Portfolio: Edge, Endpoint, Core, Cloud
  4. On Demand offering provides two options for channel partners to participate:
    1. Referral fee – 7%-10% on committed contract value including tier credit program benefit. Dell owns and manages the customer. The partner still plays an active role in managing the customer relationship. The referral fee model positions the partner to address the customer’s solution needs, and enhance their customer relationship without having to take on the usage and credit risk associated with offering a pay for use solution.
    2. Resell – Partner owns and manages the customer. Allows partner to uplift base usage charge and earn program benefits including rebates, marketing development funds, and tier credit

Pay As You Grow is for committed workloads. The metering coverage in Flex On Demand includes processor, memory, and GB consumed. Data Center Utility adds metering based on VM and per port. The solution is still in its early stages and Dell views this as a journey rather than a destination. But the offering, in early stages, is finding acceptance at many of Dell’s customers. Scalar (a CDW company) has been configuring on-demand solutions with unlimited scalability for major Hollywood studios.

Relative to the cost of conventional hardware and software, on-demand cloud solutions are generally more cost effective than equivalent CAPEX-based on-premise alternatives, and its OPEX-based billing model works well for cash-constrained SMBs and midmarket firms. Cloud’s ‘as-a-Service’ delivery model reduces the need for individual SMBs and midmarket firms to attract and retain specialized IT staff; scale up as the organization grows, and cloud provides SMBs and midmarket firms that are often unable to maintain refresh cycles with ‘always-on’ access to current technology.

SMBs are not being left out from Dell’s strategy. In fact, small and midmarket businesses are two of the fastest growing segments for Dell. Its small business advisory has witnessed tremendous success but the team is not resting on its laurels. It aims to add 100 more small business advisors in the next one year. Each advisor goes through 160 hours of in-person classroom training. Dell has built a progressive hierarchical advisory structure, based on “needs complexity” to help SMBs learn, identify, buy and deploy technology. Small businesses with specific and simple requirements can also use Eva – a chatbot – to help guide through product selection and purchase.

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Workforce enablement - driving IT benefit throughout the organization

IT provides the tools to support greater efficiency and market engagement. What are the best ways to help the workforce to capture these benefits, and be more productive? The workspace isn’t defined by windows and walls and common area couches. For millions of SMB and midmarket employees, the “workspace” isn’t a physical location – it’s a virtual space defined by access from multiple screens which are used from multiple locations. This is especially true of mobile workers, a category which is increasingly indistinguishable from “workers.” Techaisle data shows that 72% of SMB employees are mobile, 87% of SMB employees use mobile devices to access corporate information.

Workforce enablement

Techaisle global survey found that improving workforce productivity is the second most important midmarket business objective for 2019 and among the top five objectives of small businesses. Data shows that for 42% of SMBs’ improving employee productivity is a priority and 43% of SMBs are using digitalization initiatives for employee empowerment.

There are many factors involved in driving productivity, including management approaches, processes and practices, and collaboration/synergy across activities and functions. But technology is a key contributor to productivity – directly, and through its ability to positively affect processes and internal coordination.

Techaisle research shows that these benefits don’t accrue to all SMBs equally: SMBs that are advanced in their approach to IT (“Enterprise IT”) are about twice as likely to achieve the productivity-enabled benefits than lowest-performing firms, and 30% more likely to realize productivity benefits than the average SMB.

The statistics quoted above show that IT is seen as a source of productivity-enhancing capabilities – meaning, in some way, that IT has ‘permission’ from the business to help drive higher levels of workforce performance. However, improved performance requires a strategy, and in technology matters, this strategy should be driven by IT management. It is important that the IT function be responsive to business requirements, deploying requested technology and delivering user training. There is another role, though, that IT management can and should play: focusing on technologies that are proven to contribute to workforce enablement, deploying these technologies within the organization and working with business staff to ensure that the benefits inherent in the technologies are recognized and captured. This advances the IT function from simply responding to requests to providing leadership in enabling the SMB and midmarket workforce.

Techaisle’s research has identified a number of solutions that are seen as driving productivity within SMBs and midmarket firms – approaches that IT managers can and should explore as they seek ways to connect the potential of IT to demonstrable increases in productivity. Three of these solutions - unified workspace, collaboration, and mobility, are especially important in a technology-dependent economy, and each contributes meaningfully to enabling the workforce.

Unified workspace

‘Distributed,’ ‘remote,’ ‘mobile’ – these are the realities of today’s workforce. In many economies, roughly half of workers are remote for at least some part of the work week.

Increasingly, SMBs and midmarket firms are using technology to provide cohesion within the workforce. Unified workspace solutions, which (in Techaisle’s definition) “provides secure anytime, anywhere, any device access from any web browser with single sign-on and password management for all public and private applications, services and file sources used to run the business” help SMBs to organize workers into connected groups. Techaisle research has found that over 75% of firms deploy unified workspace to support the needs of multilocation and full-time remote or travelling workers. These systems also help IT to deliver on key goals of data protection and mobility enablement. Businesses that have adopted unified workspace technology believe strongly that it contributes to productivity by providing a single workspace from which employees can accomplish majority of their daily work, delivering better access to applications and resources.

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Prologue and Epilogue of Digitalization in SMB Market

Every year or two (or three), a new trend sweeps the IT industry, and breathless coverage asserts that the new phenomenon has arrived fully-shaped to transform technology and/or IT’s role in business strategy. This is, of course, very rarely true. Most trends play out over a long time, and change in technology tends to be incremental rather than revolutionary. For example – it is certainly true that digitalization (and digital transformation) are important issues today, and that they will have a transformative effect on IT and business strategy. But Techaisle research demonstrates, they are a recent highlight in a series of business issues and technology themes that stretch back at least 15 years, from 2003 to 2019.

Key SMB and Midmarket digitalization themes, 2003-2020

techaisle smb digitalization themes

techaisle wp prologue epilogue resized

As we enter the next decade, it seems that online capabilities and activities are entering a new era. There are still advances to be made in the ‘net’ realm: there is constant pressure to expand the speed of the Internet, enabling it to handle the voracious demands of unstructured content like video, and the rise of IoT and 5G portends a coming tsunami of data from billions of connected devices. However, the key focus of web-based business investment is now less about the ‘net’ and more about the ‘work’: the ways that an increasingly-connected world supports pursuit of previously-unattainable objectives. The most important IT-related development in 2020 will be this focus on connectedness – connected cloud, edge, applications, security, collaboration, workspaces and insights. Internet and the web are the navigation routes that we have been developing since the 1970s; the always-on, everywhere-connected Interwork© platform is the destination that we will be creating in 2020 and for years to come.

This eBook has been written to provide guidance to supply-side management responsible for digitalization strategies that affect sales and marketing of advanced IT solutions to SMBs and midmarket firms. The document is structured into six sections:

  1. What’s past is prologue – The Path to Digitalization
  2. Closing the gap between business priorities and IT challenges and the rise of digital
  3. Business Issues over the years – paving the route to digital transformation
  4. The rise of innovation – and digital – as a business focus
  5. IT challenges over the years – paving the route to digital transformation
  6. What’s future is epilogue: Connected Business

Download the free eBook here

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SMB IT is challenged and its role in supporting governance-risk-compliance

Managing governance, risk and compliance is an IT challenge for over 1/4th of midmarket firms and slightly more than 1/10th of small businesses in each geo – US, Europe, Asia/Pacific, Latin America. See chart below. In an SMB context, “governance” is at least somewhat analogous to “taste” in home décor, or “sustainability” in supply chain practices: easy to acknowledge as important, but difficult to define. What is easy to delineate is the notion that governance has important linkages to issues that are of vital importance to SMB management:

  • risk mitigation,
  • regulatory compliance, and
  • protection of the corporate reputation.

Governance is a way of describing the objectives of senior executives, or of the company as a whole; it is the approach that determines how the SMB interacts with its customers, its suppliers, and its community. Oftentimes, the term ‘governance’ is coopted by IT professionals, who talk about issues like “IT governance,” “cloud governance,” or “data governance.” These are important concepts, but they really refer to policies and controls.

techaisle smb compliance challenge globally 2

Policy is the ‘glue’ that connects governance and security: SMBs benefit from thinking about management issues first, and then developing positions that guide security decisions. This works as a starting point for an SMB security strategy. However, there are challenges that arise from specific IT usage patterns or events that impact an SMB’s risk profile.

Consider the issues cited in the chart below - examples of usage patterns that affect an organization’s security stance: use of cloud, and ‘shadow IT,’ or user-managed applications and/or storage that may not align with corporate security policies. It’s possible to simply state that any use of cloud or user-managed IT services needs to adhere to these policies, but the reality is that they may not: for example, a cloud supplier’s SLAs may not include corporately-approved escalation processes, and users may lack understanding of (or concern for) corporate IT guidance. This doesn’t mean that use of cloud and shadow IT should be banned – cloud is an important IT service delivery option, and to some extent, shadow IT reflects innovation within the business.

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