Dell promises 'radical,' two-year metamorphosis
Angst removal for fun and profit
Analysis IBM has its On Demand, we'll-service-the-hell-out-of-you thing. HP has its Business Technology, we'll-ink-the-hell-out-of-you thing. Sun Microsystems has its Participation Age, red-shifting, we'll-network-the-hell-out-of-you thing. And now Dell has the we're-tired-of-direct-modeling-the-hell-out-of-you Dell 2.0.
Whereas the other major server vendors have already tried their best to define the market, Dell is more of an in-process creature. It's trying to describe what the market desires at the same time as it struggles to figure out what Dell desires to be over the long-term. With any luck, Dell 2.0's perception of the market and perception of itself will meet at a decent place.
Dell's first ever CMO Mark Jarvis has inherited much of this defining and perceiving work. The smooth talker spent 14 years adding sheen to Oracle's databases before reaching escape velocity from Larry Ellison's ego and his own marketing consultancy to join Dell in April. Now, he appears primed to reinvent Dell's image - the one still centered on a grubby teenager making PCs in his dorm room - on a massive scale.
For example, Jarvis has already ratcheted Dell up to Hyperbole 2.0.
"In terms of timing, I am willing to bet that the perception of Dell as a company will be radically different within two years," Jarvis told us, during an interview this week. "We are going to revamp the whole customer perception of Dell."
In many ways, this process actually started pre-Jarvis. Dell did the unthinkable by listening to its customers and deciding last year to ship servers based on AMD's Opteron processor - a major blow to Dell's monogamous chip supply chain. Dell also busied itself with some web site cruft removal and the hiring of less abrasive call center staff. More recently, Dell started the IdeaStorm web site to figure out what customers want and discovered that Linux PCs and laptops were all the rage. (Dell made this same discovery on its own in 2000, but you're meant to focus on the power of IdeaStorm to change things, so please do that).
Jarvis talks on a much grander scale than these bits and bobs. He talks about revamping Dell's entire product line over the next two years to get the gear in-line with where Dell and the market, as the company sees it, are heading. He likes to use the word "radical" a lot to describe this transformation. (That's the closest Dell has been to radical since the Dell Dude was arrested with a dime bag).
Irony of ironies, getting radical begins with "in the box" thinking.
The company this week decided to trade in today's partner revenue for tomorrow's loyal customers via a new line of small business products sold under the Vostro brand. This gear puts a halt to icon pimping, giving customers clean, crudware-free machines.
Getting radical also entails creating things such such as server appliance-like systems under the "Project Hybrid" banner. Jarvis confirmed that Dell has eyed a virtualization appliance and a VOIP appliance to date. So, customers should see pre-configured boxes aimed at handling specific tasks rather than having to assemble hardware, OSes and software on their own.
"A company like IBM doesn't want to make hardware and software easy because it will impact their services business," Jarvis said. "That's why WebSphere is 200 different products with the same name.
"We don't have that tension at Dell and expect to ship customers a complete product. We're not going to finish off products at customer sites with our services business."
The first pieces of Project Hybrid should ship during the third quarter.
While bashing IBM's services business, Jarvis also found time to expand on Dell's own services push. In case you haven't noticed, Dell and Sun Microsystems have started pulling in quite a bit of services revenue, which must make HP and IBM nervous. Of course, Dell and Sun like to pitch themselves as low-maintenance services providers, as compared to HP and IBM, which want to form long-term marriages with your data centers.
"We're not going to come in and drink your coffee and eat your doughnuts like the other guys," Jarvis said.
How exactly will Dell's services be different? We're still not sure.
Jarvis talked a lot about offering remote management of products and performing "fixed time and fixed price engagements." It sounds like Dell wants to apply its no-frills, no-nonsense model to services, which is probably a win for customers.
Courting the next Michael Dell
According to Jarvis, the legacy dinosaurs are dying off - or at least heading into retirement. This old-man phase-out again opens a chance for Dell to get radical, since it's never had to deal with mainframes or Unix boxes.
"The question is how do we provide a new approach that will be lower cost than maintaining legacy systems," Jarvis said. "There are kids going into IT that are the first generation who have spent their entire lives on the internet. They have no knowledge of the client-server model and have never seen a mainframe. There's a radical change in the whole view of the IT department. These future CIOs don't see IT the way older people see it."
Dell's freshness attack certainly differs from what HP and IBM are selling. HP, for example, has its grand BT agenda where it wants to discuss the ways in which technology adds to a company's competitive position rather than always arguing over ROI and maintenance costs. When customers ask "Does IT Matter?", HP says "Hell, yes."
Jarvis declined our invitation to confront HP's BT plan directly, relying instead on Oracle-style rival bashing.
"HP's biggest problem is that they are not very good when they have to play defense," Jarvis said. "My job is to absolutely make sure HP is forced into playing defense."
Radically the Same
Thus far, we'd say Dell has been less radical than it claims. It added a new processor supplier, simplified its overwhelming web site, added customer support reps and removed unwanted garbage from PCs. Such moves would obviously please most customers, and there's little pride in being obvious.
Dell, however, does have a real chance to impress if it comes through with some true innovation during the two-year transformation period it has set. We'd love to see the company go against the grain and counter the likes of HP, IBM and Sun with well-made, low-cost hardware that offers something unique in the way of, say, software bundling or services.
We're not 100 per cent convinced that Dell knows how to reach this goal just yet. It remains an entity in flux, searching for a new, non-direct identity.
If there's real action behind Jarvis's words, we should see the first examples of Dell's labor in the third and fourth quarters as the Project Hybrid gear begins to reach consumers. Should this gear live up to Dell's own billing, then we are in the midst of a radical change, and we'll happily pat Jarvis on the back. If not . . . . .
No pressure. ®