Dell’s Marketing Strategy

dells marketing schema In the land of try IT, dell is often viewed as having a singular schema-build and deal out harvest-times cheaper and much efficiently than competitors, and thereby grow both market manage and gross. While that deceptively simple plan lies at the heart of dingles begin for customers, its general enterprise strategy, like its presence in the enterprise market, it maturing, growing stronger and becoming more complex with each deprivation year. dingle has crystallized its long-term strategy for business customers in a slew it calls the scalable first step, which has many kindredities with the slashing computing strategies of its competitorsIBM (On Demand), Hewlett-Packard (Adaptive Enterprise), and so forth. scalable Enterprise is centered on dingle products, service and alliancesall of which are grow in industry examples and cloaked in the famous dingle place model. The come with has been promoting and marketing this visual sensation for only a a few(prenominal) years, only if it has quickly become a focal point for how dingle rationalizes its product and serve roadmaps.And it intersects with dingles overall view that the industry leave aloneing continue to leverage clusters of high-performance, industry-standard servers and operating environments, and move away from larger-scale, proprietary systems. more(prenominal) important, the Scalable Enterprise vision also gives dingle a mode for speaking with customers about its overall determine proposition, and how it heap help customers transmigrate to the long-term dynamic computing vision.dells Services employees, in finicky captain serve, play a critical role in evangelizing the nurture of the Scalable Enterprise and in engaging customers in discussions as to how to compensate the vision real in their IT environments. dell has never aspired to grow its headmaster services business to rival those of IBM Global Services (IGS) or the world(a) systems integ rators (GSIs). However, the company does recognize that services are a linchpin for part customers use dell products to salute both their IT and their business challenges, and convincing them that dingles products and solutions are truly enterprise-class.To that end, Dell has refocused its professional person services portfolio (and its broad(a) services roster), placing overall customer satisfaction, lifecycle services and the Scalable Enterprise at the core. In this report, I am examining how Dell is trying to leverage professional services to drive its Scalable Enterprise vision. We begin with an overview of how customers view Dells Scalable Enterprise vision, based on data from a recently completed Summit Strategies survey.We then briefly review the tenets of the Scalable Enterprise strategy and drill down into Dells services portfolio, with a particular focus on professional services and round of Dells newer offerings. We conclude with suggestions about steps Dell can take in particular with enterprise services partnersto further call forth its professional services strategy and spread its Scalable Enterprise vision throughout the market. We first explored Dells services strategy both years ago (see our January 2003 report, Can Dell Find Success in Enterprise Services? ).Then, Dell was still refining its services strategyparticularly, how it would move forth in enterprise services. At that time, many of Dells executives were concerned that customers did not view the company as a strategic enterprise vender, or thought that Dell lacked enterprise-level expertise for conniving and deploying IT environments. What a difference two years can make. We recently asked IT buyersenterprise and SMBto identify their most strategic IT vendors, both for overall IT strategy and in a variety of different IT areas, including stem software and implementation and book.As shown in lick 1, when we asked all respondents how important various vendors would be to th eir organizations overall IT strategy during the next three years, Dell ranked fourth (19%) among those vendors identified as most strategicbehind Microsoft (36%), IBM (21%) and Cisco (21%). Dell ranked ahead of Hewlett-Packard (HP), Oracle, Sun Microsystems, SAP, and some global integrators and outsourcers. Another 28% named Dell as one of their top two or three most strategic vendors.In another survey data point, among large enterprise customers (with 1,000 or more employees), Dell ranked as the 5th most strategic vendor (20%), with Oracle moving ahead of Dell. The news was even better for Dell when respondents were asked about strategic vendors for their server and storage strategies during the next three years. Dell came out on top among enterprise customersahead of HP, IBM, EMC and Sun (see Figure 2). Dell also outpaced IBM among small and medium businesses (SMBs), a market that both companies view as a strategic priority.While these two data points do not directly relate to t he robustness of Dells services capabilities, they do demonstrate that Dells profile as a canr of enterprise-caliber solutions has gone up considerably in the past few years. In addition, when we asked our survey audience to select their most strategic vendor for IT support and implementation services in the next three years, Dell placed fourth among total respondentsagain behind Microsoft, Cisco and IBMand fifth among enterprise respondents.Its also clear that Dells careen that lower-cost, standards based systems can handle IT functions previously reserved for higher-end, proprietary systems is evocative with customers. Also, Dell may benefit from its high-profile consumer business, with familiarity in consumer markets breeding a similar familiarity at the corporate customer levelalthough there is no conclusive evidence about a linkage. The momentum is helping propel Dell and its Scalable Enterprise strategy into a leadership position in enterprise IT environments (see Figure 3) .Based on an unwavering belief that IT customers want simplicity, optimization and better management, Dells Scalable Enterprise vision encompasses Dells mission to standardize core elements of IT datacenters to deliver these capabilities. It emphasized de facto standard products, open standards specifications, customer choice, lifecycle services and the advantages of Dells direct model. The Scalable Enterprise encompasses some, but not all, of the characteristics of Summit Strategies dynamic computing role model.This framework tightly aligns IT and business goals through the use of new infrastructure components and virtualization capabilities, automate and policy-based service management capabilities, and optimized business processes. Dell is positioning itself to focus on many of the infrastructure hardware elements of dynamic computingand is bringing in partners to solve the major infrastructure software, management and business process challenges of the dynamic computing equatio n (although some Dell-developed management capabilities are becoming progressively strategic for the vendor).IBM and, to a lesser degree HP, talk to customers about their strength to deliver dynamic computing solutions from either the bottom-up (aiming to make the IT infrastructure more flexible and adaptable) or the top-down (analyzing business processes and then changing the underlying infrastructure to better support them). Dell, however, approaches customers with a more narrowly-focused value proposition that stresses a phased approach to drive standards and scalability within an enterprise datacenterwhich will lead to better IT support and adaptability for usiness processes over time. In fact Dell believes that its Scalable Enterprise vision will not come to dear fruition until 2008, when the company plans to deliver more automated policy-based capabilities, self-monitoring tools and dynamic preference allocation for heterogeneous systems. Of course IBM, HP and others woul d say they can provide a greater array of dynamic computing solutions now, and that customers have no need to wait several years to take advantage of them.However Dell believes customers will be more comfortable with their longer-term, phased-in approach that emphasizes standardsand that by supplement its direct model customers will see Dells approach as more affordable as well. When we profi led Dells services business two years ago questions lingered over whether Dell could sustain its services business and how strategic services would play into the companys future (Scalable Enterprise had not yet been introduced).Today, with services as one of the three main pillars for the Scalable Enterprise strategy, there is small doubt about services overall importance to Dell. Services soon generate about $4 billion in annual revenue and it is one of the fastest growing parts of the companys business. In fact professional services revenue has doubled over a two-year period, with signific ant growth in both the U. S. and overseas markets.As write previously, Dells services reflect the companys overall philosophy that customers want more standard, less custom and more lifecycle IT solutions. Dells approach has been to slowly expand beyond traditional support services (which still generate the majority of Dells services revenue) with more repeatable, higher value-add professional and managed services, both directly and through partners. To address this Dell is attempting to highlight its business-centric expertise in existing and new professional services offerings.