Techaisle Blog

Where is the market for client devices going – and what does it mean to corporate strategy? These are questions that Techaisle and its clients – and the industry as a whole – has been wrestling with ever since the decline of the traditional PC opened the door for alternative client technologies.

In many cases, users now combine mobile and fixed devices, and with this multi-device approach, consistency and security become even more important than they were in the laptop era. Many organizations are responding to a need to securely manage and distribute user data and applications by investigating virtual desktop (VDI) technologies enabling delivering of “desktop as a service,” or DaaS. With VDI/DaaS, businesses deploy client virtualization technologies from suppliers like Citrix and VMware to ensure that users have anywhere/any time/any device access to current information, their applications and their desktops. These technologies allow for better data security and auditability, and often offer the additional benefits of reduced CAPEX and OPEX.

The allure of VDI and DaaS is clear – but the technology itself and the path to realizing its benefits can still seem somewhat mysterious to many small and mid-sized businesses. To understand implementation challenges and lessons learned, Techaisle conducted depth interviews with small and mid-market businesses (from 50 employees to 999 employees) that are currently using VDI and/or DaaS solutions. Based on a random sampling these businesses belonged to financial services, professional services, manufacturing, construction, utilities, retail and private education segments. These early adopter SMBs have rolled out VDI and/or DaaS solutions within their organizations. The number of users using VDI and/or DaaS within the businesses interviewed ranged from a low of 30 employees for a small business to a high of 600 employees within a mid-market business.

Techaisle’s quantitative VDI/DaaS research shows that the key user objectives in adopting either on-premise or hosted VDI/DaaS solutions revolved around mobility, application availability from anywhere and on any device, disaster recovery, centralized management and administration of end-point devices at the same time reducing costs. Based on users’ real-world experiences and feedback, Techaisle has compiled a list of seven key lessons for success for small and mid-market businesses planning to adopt VDI/DaaS solutions.

1.       Prepare a roadmap of the solution and a blueprint of implementation process

Before starting the implementation process and before even considering a pilot, current VDI/DaaS users advise potential users to create a roadmap of the solution and a blueprint of implementation process. The roadmap and blueprints should include solution and brand selection criteria, a list of solution components and their objectives, changes required (if any) to the core infrastructure to support the solution, costs involved and budgets for cost overruns, security vulnerabilities, phase-in of users and their training process and timeframe for enhancements post implementation.

2.       Hire external consultants - people who have experience

It is almost impossible to develop a roadmap and blueprint without the guidance and close involvement of experts.  All SMBs that we interviewed had contracted with external consultants varying in size from a group of 4-5 to a maximum of 40-50 people. In each case, consultants were preferred over resellers and service providers due to their focused deep expertise and track record. However, each of the current users of VDI/DaaS had decided on either Citrix or VMware solution prior to engaging with consultants with corresponding expertise.

“We approached our known consultant which is a small company formed by 6 to 7 people and have expertise in VMware solution. They are highly technical professionals providing free infrastructure and free connectivity support and covering infrastructure maintenance and end user connectivity”.

“We preferred going with Consultants as they had solution specific expertise. They gave optimal options taking into consideration both cost and technology sound solution. They even offered technical assistance even after post implementation and maintenance for one year. They are a small company with VMware expertise formed by a core group of people”.

“We approached consultants, a small group of people, with deep Citrix expertise, because they had relevant qualifications and certification”.

3.       Ensure that the solution supports legacy software

Not all SMBs are using all modern applications; many mid-market businesses have core legacy applications and/or applications that are essential to a specific department and workgroup. Current SMB users of VDI/DaaS advise that the blueprint prepared should include a list of applications currently being used within the organization and to systematically test to ensure that they will continue to be supported in the new DaaS environment.

The VDI/DaaS SMB users also advise that businesses should also revisit the current licensing arrangement they have for some of their applications and ensure that in a virtualized environment those licenses are valid and applicable.

“We learned during the implementation phase that not every application is supported by VDI or DaaS solution. It is difficult to understand and analyze the amount of storage used by different departments”.

“The main concern was with software licensing concerns. Few of our application’ licenses restricted the use of software on systems accessed by terminal servers. There were issues coming up initially that affected our end users as these applications were not accessible on multiple virtual desktops”.

“The main concerns were the length of the project, the cost of the project and back end integration. Backend integration was a major concern as we have legacy application running on the system”.

4.       Get the business users ready

Business users do not like changes that affect their interfaces – it takes time to build new usage habits, and this can (and generally does) have a short-term impact on productivity. Although a VDI/DaaS roll-out is often used to deliver better mobile systems to business users – generally, a well-received benefit – it is essential to prepare the business users with new interfaces, log-ins, support mechanism, and training on the use of thin clients. This will require IT to manage a number of VDI/DaaS-specific issues, including application downloads to user devices, management of persistent or non-persistent desktop experiences, and tactics to address latency if/where it impacts performance.

“A challenge we faced post implementation was to manage new rounds of user trainings. The new solution meant introduction of a different system to the users and one where users had to undergo a series of trainings to become comfortable with it”.

“The main challenge that we faced was user training and that was a really big concern for us”. 

“We had to give training to users in about two weeks which was taken out of their operational hours and once the service was put in place the learning was steep, the users were not very productive during that time”.

“Most of the issues were to do with the users who were unable to come to terms with the changes and the content that could access easily”.

5.       Conduct a pilot

Conducting a pilot helps in fine tuning the roadmap and blueprint for implementation.

“During the pilot test, we observed a need to modify our terminal server as they were not responding to the end users request. Then we decided and made changes in terminal server by making a cluster of terminal servers so that similar end users request would be sent to desired terminal server, to cut down network traffic congestion”.

“At the initial stage we started facing issues which were basically related with bandwidth or poor network response. We decided to increase our bandwidth for offering end-users customizable experience similar to that of a physical desktop”.

“In the pilot stage some issues popped out. First of all, the expected cost for the pilot stage rose considerably. Also we got a mixed reaction from the team using it as some said they were able to fully utilize the resources, whereas when we tested it over other networks like WLAN, the data was not accessible”.

6.       Create a detailed budget, be prepared for cost overruns

The current users of VDI/DaaS suggest that potential adopters should budget 25 percent for software, 20 percent for services, 20 percent for networking and one-third for hardware. The percentages vary for small businesses where the budget allocation for hardware varies between 10-15 percent and the proportional cost of software rises to 30-35 percent. Current users advise businesses that have legacy applications to allocate higher budgets for hardware and services, as high as 45 percent and 35 percent respectively.

As many as 40 percent of SMBs indicate that cost overruns of 10-20 percent is a given.

“There was additional expenditure required. The testing phase was difficult as we had to change our server and switches”.

“In testing phase we found out that the users had to get software assurance which delayed the project, delayed purchase of licenses and forced additional expenditure”.

7.       Upgrade server and network infrastructure

The most common and almost universal changes to the IT infrastructure to prepare for VDI/DaaS usage are installation or upgrades of blade servers, upgrading cabling to fiber optics cable thus enabling substantially higher data bandwidth, replacement of switches for routing higher throughputs, installation of thin clients and in some cases increasing storage.

Current users generally opted for specific server and thin client brands based on either recommendation from their consultants or because of existing relationships. Brands most often used were IBM, HP and Dell. Most SMBs preferred to use Blade Servers.

“We upgraded cabling by using fiber optics cable which boosted our bandwidth and smooth flow of data from the data center to the end users. We used fiber optics as it was a cost effective solution for us rather than going on with existing metal cabling which had an impact on bandwidth”.

“Networking and replacement of cabling was one issue as it did not work with the solution initially, the cabling between the server switches and office switches and for this we looked for fiber cabling”.

Concluding observations

The need for VDI/DaaS as a mobility enabling technology is clear, and its corresponding benefits for user experience and data management are compelling. However, the path to VDI/DaaS can be tricky to navigate. By capitalizing on the advice provided by current users, SMBs interested in adopting VDI/DaaS can set realistic objectives and expectations, and can manage confidently towards effective deployment.

Michael Dell is one of the very few CEOs I know that walks the hallways with almost no posse of overprotective PR and communications personnel. It was therefore no surprise that in my meeting with him he walked into the room unassumingly and on time to discuss his vision and focus on the Emerging Markets.

Much has been written about how happy and relaxed he looks after privatization. For me, however, the tell-tale signs of tranquility and a zip in his walk first appeared two years ago when he announced Dell’s intent to be an end-to-end solutions provider for businesses of all sizes. He had a roadmap to reach the flag at the end of a long, unpredictable race-track. And he knew that he was at the starting gate with the right set of acquisitions. He just had to make everyone believe in Dell.

Fast forward to present, privatization has emboldened Michael Dell and his entire leadership to take their message on the road that the new Dell is “100% customer focused, providing best value, ease of use & flexibility” aligned to the four tenets of Dell solutions – Transform, Connect, Inform, Protect.

Michael Dell is “Investing to Accelerate” around five key areas, one of which is the emerging markets, the topic of our meeting.

1. Invest to expand solution offerings (R&D plus M&A plus Venture Fund)

 

1. Enhance & Simplify customer experience

 

1. Increase pressure in emerging markets around the globe

 

1. Grow PCs, tablets and virtual computing services

 

1. Expand sales force and channel relationships to better serve and support customers

Dell as a company made several major announcements at its recently concluded Dell World 2013:

• Public cloud ecosystem partnerships with Google Cloud, CenturyLink, Microsoft Azure

 

• Dell Red Hat OpenStack partnership for co-engineered enterprise-grade OpenStack private cloud solutions

 

• Partnering with Dropbox to enable businesses and their employees work in a mobile work-environment while providing the security and manageability with Dell’s data protection solutions

 

• Dell FluidCache for  SAN storage delivering over 5 million IOPS in a converged infrastructure of storage, server and networking

 

• Revamped PartnerDirect program giving partners bigger profit opportunity than ever before – access to tens of thousands of Dell accounts

 

• US$300 million Strategic Innovation Venture Fund to help identify, fund and fuel visionary technologies that anticipate and address future IT needs

Not all of the above announcements are applicable to and can be used by businesses in the emerging markets immediately. Therefore, I began our conversation by asking him if there is a difference in his strategies for established and emerging markets and what top characteristics defined his emerging market strategy.  Michael Dell recognizes that in many emerging market countries, there are essentially two markets (upgrade in automated environments, greenfield in businesses that are not yet automated) and therefore he has to gear up to address their needs accordingly and investing in localization of products and services for the emerging market buyers.

Looking back at my discussion with Michael Dell, I see one strategy but three approaches that are critical to Dell’s growth in emerging markets.

PC Led Go-to-market Approach

Regain its hegemony in end-point devices (excluding smartphones): by building innovative end-user computing products at extremely competitive prices. In countries like China, India and Brazil. Dell is aggressively opening its own Dell stores for customers to experience the products first-hand. Michael Dell does not view todays IT landscape as a post-PC era. He reminds me that when the term was first coined in 1999, approximately 100 million PCs were sold, but in 2012 over 300 million were sold, defying the very notion of the PC fading from view. “It certainly is not a post-PC era”, he insists.

Techaisle Take: It is certainly the right entry-point into most businesses. With global PC market slowdown, PC market penetration will continue to be driven by emerging market countries with new business formation and increase in PC to employee density. Our research shows that there are 1.26 billion addressable households in emerging markets but only one in four have a PC. Similarly, there are 44.7 million SMBs in emerging markets, but only two in five have a PC. Both of these figures indicate a huge opportunity for new PC sales as there are still 26.4 million SMBs and 994 million households that have yet to buy a PC – a huge gap indeed. Dell will need to exert more pressure than other PC OEMs in terms of customer pull: creating demand through marketing, and relying on its own stores and channel partners to close prospects after they are engaged.

 

Many of the emerging market countries are embracing mobility faster than established markets which create unique challenges for Dell to push its Tablets in the face of high adoption of Android and iOS devices. Market share of Android and iOS tablets vs. Win8 would seem stacked against Dell but one should not discount Dell’s expanded tablet portfolio including Android OS and Dell Chromebook plus well-received Win 8.1 tablets. Dell also has had emerging market success with Dell Wyse cloud clients and new opportunities with ultra-mobile cloud devices (Project Ophelia/Dell Wyse Cloud Connect) – all of which create customer entry points for Dell. Additionally, Dell’s mobility strategy extends beyond Dell-branded devices and includes software and services to ensure that any device is secure, manageable and reliable, part of the end-to-end solutions strategy.

Channel Partner Led Go-to-market Approach

Grow with channel partners:  Channel partners are the essential cogs of the IT landscape, especially for the SMBs that are so important to PC growth – and this is truer in the emerging market countries than established markets. Dell plans to continue to recruit channel partners that align with Dell’s value proposition and can add business value to a customer’s needs by giving the customers choice of best-of-breed solution components. The recent announcements of the revamped PartnerDirect program and the corresponding re-organization of its channel organization were made to address the changing needs of the channel partners across all geographies. Apart from growing the channel base, Dell is also planning to increase spending on sales/marketing within the emerging markets thereby creating enough pull in the marketplace to enable channel partners not only sell more but also sell more effectively within and across its channel friendly solutions - PowerEdge VRTX, Storage, Networking, Software, Thin Client, Workstations, and SecureWorks. However, not all solutions, especially, software solutions, can be sold without proper localization; Dell recognizes this, and is investing in R&D to make sure that products and solutions are enabled for the emerging market countries.

Techaisle Take: As per Techaisle research there are over 340,000 channel partners in emerging market countries. To support growth Dell has to have a rich landscape and integrated fabric of channel partners that are moving in unison with Dell as its trusted supplier. As Dell moves to create better alignment with the channel, it needs to be mindful of two interesting changes that are occurring within the emerging market channel partner community – members now refer to  themselves as solution providers, (not as VARs, SIs, or resellers), and they have started calling their customers “clients” much like a consulting organization would do. To be successful in emerging markets channels, Dell has to capitalize on these changes. It also has to quickly develop a timeline for the roll-out and implementation of its new PartnerDirect Programs and Incentives for countries outside of North America. Dell may not be able to make bold statements of how many accounts have been opened up (similar to the US) for collaborative sales efforts with channels but at a minimum it has still to identify named accounts that are being transitioned to channel-led, and a compensation accelerator to incent direct sales force to work with channel partners.

Solution & Services Led Go-to-market Approach

Provide end-to-end solutions for businesses of all sizes: No end-to-end solution portfolio is complete without software and applications. After a long slog, Dell software is finally coming together with its systems management offerings covering BI for IT, mobility management, data center management, cloud management as well as “connected security” that reduces the seams in a customer’s infrastructure. The software solutions are being complemented by Dell Services (which was given more visibility at Dell World than ever before, with keynote sessions led by services). Dell has achieved some great successes in countries like India within the healthcare segment, but it has still a lot to work on. In emerging markets as in North America, the mid-market segment is the primary target for Dell’s end-to-end solutions.  As Michael Dell said, “it is not easy to put feet on the ground effectively and uniformly across all countries”. He also said, “Many new change vectors are going on and Dell has the ability to understand where the puck is going”. Taken together, we at Techaisle view these statements as outlining an approach where Dell will commit resources selectively to high-growth segments within the emerging economies.

Techaisle Take: Dell is almost at the finish line with its converged solutions that include storage, security, servers and networking, the services needed to deliver end-user solutions that help businesses compute in environments with pervasive data access. Growth in sales of this type of sophisticated solutions in emerging markets cannot be cracked without the support of channel partners. Dell has to articulate a message that serves the needs of customers of hybrid solutions that combine server, storage and networking hardware with systems management and security software to seamlessly support application delivery, data protection and backup. By offering a wide range of product types, and focusing on making the selling motion as clean as possible, Dell can enable its partners to focus on customer requirements rather than product silos.

 

One early indication of the force of this direction is the fact that Dell has finally been able to put a stake into the ground with its cloud strategy. To put forth the point more forcefully Michael Dell said, “When you go with Cloud, go with Dell”. Dell’s mobility strategy has also started to take shape with aggressive roll-out of devices and its EMM (Enterprise Mobility Management) solution that includes both end-point and container management. Dell is still working on its Big Data/Analytics strategy. But more importantly, Dell clearly hits 7 out of Top 10 2014 SMB IT priorities and addresses 7 out of Top 10 2014 SMB IT Challenges. It is also in a strong position to speak to the Top 10 2014 SMB Business Issues.

Final Techaisle Take

Emerging markets are more complex than we usually imagine, having a mix of mature and very immature segments based on local infrastructure. For example, Tier 1 cities are akin to US as a country – they are advanced in their infrastructure development and employment and have a high GDP while Tier 4 cities are fast developing, less populated, in some cases even rural. When we analyze our SMB (a segment that Techaisle tracks globally) survey data across cities we see that SMBs in Tier 1 cities are the early adopters of cloud whereas Tier 3 and 4 cities although aware of cloud are constrained in their adoption by channel competency and vendor penetration. Reliable and high quality bandwidth is a critical factor in bringing the benefits of cloud to local business, one that underscores the importance of central government investment in telecommunications infrastructure and Internet access. Dell recognizes these challenges and short-comings, and the new Dell is primed to aggressively address the challenges.

There is yet no clear leader in the emerging markets in cloud, mobility and Big Data solutions. Specifically with respect to the SMB segment and the channel partners that serve it, the new IT solutions of cloud, mobility, social media, virtualization and analytics are rapidly moving SMBs from enablement to empowerment. Using technology, SMBs are reaching their full potential in the shortest period of time possible. The process of an SMB’s growth and steps to absorb IT are no longer steady and predictable as compared to five years ago. Understanding the drivers of SMB transformation and the relevance of cloud-based IT, and marketing to both customers and channels accordingly, will be critical steps in enabling Dell and its channel partners to achieve market success.

Over the last 2-3 years, Dell has heavily expanded and calibrated its enterprise solutions capabilities and more recently doubled down on further investment in its PCs and Tablet business. As the company has adjusted the levers of these key drivers for its business, it appears that these two critical areas for Dell are coming further into balance. Post-privatization Dell has begun the process of finding its feet on the ground and it knows where it wants to land. It will be a year before we will know if Dell has managed to land firmly or has caught the slippery slope.

I first met Jag Randhawa at Dell World. It was a meeting organized by Dell Analyst Relations to showcase Dell’s Cloud Business Applications. Unbeknownst to Dell Analyst Relations, we hardly discussed Dell. What struck me immediately was his smiling demeanor and an earnest desire to be a champion of business innovation and his views on what IT could do to spur growth through employee involvement and implementing new technology ideas.

We re-connected, ten months later at his office.

Jag Randhawa is the VP of IT at CAMICO Mutual Insurance Company, an SMB with slightly less than 100 employees. And he is the quintessential CIO who loves his job, his company and his fellow colleagues. He also showers high praise on Dell’s customer intimacy, likes VMware’s virtualization solutions and embraces Open source.

Specifically, he uses Dell for Network, Switches, PCs, Servers, Storage and is purchasing Microsoft Software. From VMWare, he uses their server virtualization technologies and software like VMotion and inventory management software for managing all the VM servers.

Cloud Focus

His is a Dell shop, to the extent that he has replaced all existing storage and security solutions with those from Dell. He and his IT team of twelve do not work with any channel partners. His philosophy – whichever applications that can be pushed to the cloud without compromising security of his customer data, just do it. And he has done it; CAMICO is using 12 cloud applications which are:

1. SalesForce.com – Sales Management

 

1. SilverPop – Marketing Automation

 

1. Nexure – Agency Management Solution

 

1. Acuity – Legal Partners Expense Management

 

1. DocuSign – Electronic Signature

 

1. LearnLive – Webinar Broadcasting and Training

 

1. ADP/HCM – Payroll and Human Capital Management

 

1. Skype – IM and Video

 

1. Paypal and Total Biller Solution – Credit Card Payment Gateways

 

1. Concur - Travel Expense Management

 

1. RingCentral – Telephony

 

1. MailRoute – Email Spam Filter

Business Perspective Focus

To increase employee engagement and help grow the business, he created a Bottom-up Innovation Program at CAMICO, in which employees submit ideas to grow the top-line, increase operational efficiencies, improve customer service, enhance business processes, and reduce cost. This program has generated many valuable ideas, and as a result he is embarking on two of his most ambitious business focused IT projects.

1. Using Open Source for eCommerce solutions

 

1. Developing a Big Data Proof of Concept

Both of the projects are still in infancy stage and they are both being developed using Open Source. To explain further on the eCommerce solution initiative, he says, “We currently host our website and members-only extranet using Oracle Portal, and now we are planning to use Drupal for our website and another open source software for extranet, which is yet to be determined. Our website and extranet also have eCommerce capabilities embedded in it, so we will be porting our eCommerce into this new Open Source portal”.

He is most excited about the big data project which is his initiative to provide actionable insights and perspectives for the business management at CAMICO. When I asked him about the key objective of working on a big data project, he said, “We are experimenting with Big Data using many of the Open Source software to analyze and find correlations among loss trends. The first objective is to find loss causes in our current data and subsequently use these findings to better underwrite future risks.”

Employee Engagement Focus

As mentioned earlier, The Bottom-up Innovation Program was his brain child. The program encourages all employees to submit ideas that could add value to customers or the business. Employees observe their environment, listen to customers, and bring their outside experiences as consumers to generate ideas that could benefit the company or customers. These ideas are validated, refined and prioritized by a committee of fellow employees. For every accepted and implemented idea, employees are recognized for their contributions through intrinsic and extrinsic rewards. This program makes employees more an integral part of the company, thereby increasing employee engagement and retention. The program has become such a success that he is invited to speak at several industry events for the benefit of other organizations. He not only speaks about the concept but also explains the implementation mechanics and expected outcomes of the program.

Overcoming business challenges

Similar to most other CIOs, he and his team have a long list of IT initiatives but the top four initiatives for 2014 and beyond are:

1. Replace Website, Members-Only and eCommerce platform

 

1. Use Big Data for analyzing current and future risks

 

1. Move more infrastructure solutions into the cloud

 

1. Build targeted Mobile solutions

But there are enough challenges that his team (he detests the word “staff”) has to overcome. As per Jag, the biggest challenge for any IT department is money and talent. He elaborates on his statement, “There is never enough money to do everything we want to do. However in my view, if there is a business justification for an expense, money is never an issue. The definition of business justification is, for every dollar spent how much money the new solution is going to make or save? There are times when you cannot find direct or immediate benefits, so you have to find creative ways to show value and sell new ideas. Cloud applications make it easier to try new solutions without heavy upfront commitment”. To qualify, he quickly states that the big data project was unscripted and not budgeted but he was able to create a business value which catapulted it to be among the top four IT initiatives.

Business Focused CIO

He is very clear in his mind that there has never been a better time to be a CIO. And he has a message for other IT leaders, “Technology has become an integral part of the business. IT leaders should always be thinking of how they can leverage technology to create competitive advantage, grow the business and create operational efficiencies.” As if on cue, he recites what he practices:

1. Partner with business peers. Look for ways to help them achieve their goals faster using technology.

 

1. There is no IT project; every project is a business initiative. If you want funding for any initiative, figure out how it adds value to the business.

 

1. Find partners who will help you showcase the value of technology.

 

1. Above all, build credibility with your peers by providing excellent service.

Way to go.

As uncertainty swirls around both the IT infrastructure needs of the SMB market and the channel that supplies these solutions, Dell’s channel team, led by Greg Davis and Bob Skelley, could not be more upbeat. And as Techaisle research shows, channel members of Dell’s PartnerDirect program continue to power on.

In a recent Techaisle study of channel partners selling Cloud, Mobility, Managed Services, Virtualization and Datacenter solutions to SMBs, 58 percent said that Dell is a trusted brand with 48 percent mentioning that Dell is a reputable brand. With today’s announcement on software competencies, Dell is looking to build on that presence with an expanded portfolio addressing essential (and high-growth) infrastructure software products.

Partner Voice

It is clear that Dell considers sales enablement and execution to be the keys to its channel success. The company exhibits very tight focus on issues like deal registrations and training. In qualitative interviews, Dell’s partners say that Dell is easy to work with. They report that Dell’s partner program is straightforward, with a low threshold to enter, reasonable certifications’ requirements and all training materials available online. Dell partner executive Marcus Lindqvist, Country Manager for Sweden’s Dustin AB highlighted the benefit of this approach when he shared with us his reasons for being upbeat on Dell: “deal registration, robust process that protects the partner investment in our engagement with Dell on a deal by deal basis. We register the deal at an early stage in the sales process, most deal registrations are approved, and from that point we are in the lead without any future discussions about other partners or Dell direct sales undercutting our work. Deal registration is done online with quick turnaround times.”

Echoing the sentiments, Daniel Serpico, President of FusionStorm, [partner of Dell] noted, “[there is] very real clarity around deal registration and partnering; there is significant value creation around integration and configuration and Dell has infused software and tools to win with Dell.”

Software Competencies

It was only a matter of time before Dell extended the PartnerDirect program beyond its roots, from enabling and incentivizing hardware sales to rolling out software competencies. Over the past year, with numerous acquisitions and the hiring of John Swainson to helm Dell’s software operation, Dell has launched an aggressive strategy to build scalable enterprise software offerings into its solution portfolio, with emphasis in the areas of datacenter and cloud management, information management, mobile workforce management, and security and data protection.

On September 3, Dell announced four new PartnerDirect software competencies, including:

• Security: Includes identity and access management, as well as network, endpoint and email security


• Systems Management: Includes client management, performance monitoring, Windows Server management, virtualization and cloud


• Data Protection: Includes enterprise backup/recovery, virtual protection, application protection and disaster recovery]


• Information Management: Includes database management, business intelligence/analytics,  applications and data integration, and big data analytics

Dell partners now have the flexibility to decide between reselling hardware only, software only (via resale or a referral fee program) or both hardware and software. As per Techaisle’s Marketview, worldwide SMB (1-999 employees) spend in 2016 for the above four competences will be US$11.1 billion. Combine it with traditional datacenter solutions that includes servers, storage, networking the market spend jumps to over US$40 billion by 2016. This is a huge opportunity indeed for Dell and its channel partners.

Best-of-breed Solutions

The latest Techaisle channel partner study found that 54 percent of channel partners prefer to offer best-of-breed solutions to their SMB customers, with 28 percent preferring single vendor solutions. The key to successfully addressing both preferences is to combine best of breed offerings under a single brand, allowing partners to also take advantage of integration and volume benefits. HP and IBM have been active in staking out this territory; with the September 3 announcement, Dell has signaled its intention to compete aggressively for leadership within the small and mid-market business market segment.



In the cloud infrastructure area, Dell’s partner program rests on three pillars - Cloud Builder, Cloud Provider and Cloud Enabler. For all three pillars, best-of-breed solutions take on an entirely different meaning as shown in another study recently conducted by Techaisle. The study was done to understand the Winning Strategies of Successful and Profitable SMB Channel partners selling cloud.

The study revealed that channel partners that are comfortable and profitable with cloud solutions combine best-of-breed solutions and wrap them tightly under their own offerings & services. These channels have also begun to utilize reference architectures from their vendor partners.

Training as the Lead-in

Channel partners prefer to partner with IT vendors that have quality products and innovative technology solutions that solve SMB pain points. This presents a complex challenge to vendors like Dell: partners need suppliers to both address customer requirements (with innovative, reasonably-priced and easily-deployed technology that addresses SMB pain points) and partner business requirements, such as training, pre-and-post sales support, and lead generation. As the results of Techaisle’s research demonstrate, product training is particularly important in this context. Dell is clearly cognizant of this demand: Marvin Blough, executive director of Worldwide Channels and Alliances for Dell Software is on record as observing that “Trained partners sell four times more than their untrained counterparts,” and Dell is said to be on plan to deliver over 250,000 training sessions this year.

Techaisle has observed, however, that most vendor training focuses on product attributes, and does not address development of the skills (building and advising on infrastructure strategy and workload roadmaps, establishing effective sales tactics and compensation models, developing the services competencies needed by customers) required for VARs to migrate successfully to advising on and deploying hybrid infrastructure. These advanced management-level training offerings will be essential for vendor differentiation, especially for the complex hardware/software solutions that are at the core of Dell’s evolving strategy.

Concluding Remarks

Clearly, building leadership in the SMB infrastructure market is an ongoing challenge: requirements continue to evolve, entrenched vendors have strengths and relationships that have developed over many years, and Techaisle’s research has found that trusted brand figures for Dell are lower than for some of its competitors. Its brand equity score (BES) among channel partners is also lower than its competitors. It seems clear, though, that Dell is aware of market requirements and willing to invest in its SMB market and channel success, rolling out training modules, integrating partners acquired through acquisitions and combining both hardware and software for end-to-end solution delivery.

Michael O’Neil, Consulting Analyst with Techaisle, notes that “Infrastructure delivery has become a very challenging issue for business partners. Hardware-only sellers are at a significant disadvantage in a market where buyers are looking for hybrid solutions involving both on-premise and cloud-based platforms that combine server, storage and networking hardware with system management and security software to build solutions that will seamlessly support application delivery, data protection and backup, and many other key operational objectives. By offering a wide range of product types, and focusing on making the selling motion as clean as possible, Dell is enabling partners to focus on customer requirements rather than product silos.”

Looking at Dell’s approach from a partner’s perspective, Daniel Serpico provided an apt summary: “Dell sales teams cover all markets, which allows us as a partner to be able to have discussions with the Dell account manager on a specific account or deal, giving us a counterpart that understand the end-customers actual requirements and needs. Both teams have a laser sharp focus on the customer and to jointly win the deal [supported by] shorter turnaround and quick responses from Dell.”