Dell’s Next Move: Turning Software into Gold

April 28, 2013

Dell’s Next Move: Turning Software into Gold

Dell is a company in transition. As we have seen with many companies that have a hardware legacy, Dell is transforming itself into what it calls “an end-to-end solutions and services company that services mid-sized enterprises”.  Software will clearly be the key to this executing on this strategy.    This is not a transition that can be undertaken lightly.  It is complicated not just to obtain the right software but also to change the culture of the organization at the same time.  Dell is moving full steam ahead into the software market under the leadership of John Swainson, a veteran of both IBM and Computer Associates.  I clearly expected that after living through the complexities of transforming Computer Associates that John would take a break.  But as many software leaders discover, transforming companies appears to be an addiction that is hard to break.

Creating Dell Software is a work in progress.  The goal of the emerging organization is beginning to come into focus based on Swainson’s leadership.  In essence, the foundation for Dell’s software strategy is centered on the acquisition of Quest Software last year in addition to a variety of software companies purchased over the years.  At its recent event to detail the progress of the software business, John Swainson provided a roadmap for turning Dell from primarily a PC company to a software and services company.

Here are my main takeaways from this meeting.

Dell is following the right approach by creating a unified software environment focused on end user computing, services, security, and cloud combined with servers, storage, and networking. With the various acquisitions including Quest (database management, performance monitoring, data protection, user workspace management, Windows server management, and identity and access management and Gale Technologies (infrastructure automation software).  The combination of these technologies transformed Dell software into a division with more than $1.5 billion in revenue.  Swainson’s goal is to weave these pieces of software together to create a unified and flexible solution that will tie the parts of the business together. Based on the various acquisitions it is not surprising that there are four components to the software strategy: cloud, security, and risk, big data, and mobility.  Dell will have to demonstrate that it can execute on this strategy since it will have to show the financial markets that it can replace revenue as the PC market continues to show.

How will Dell attack these four strategies? The plan is to leverage the technology components to create a unified stack.  For security Dell will leverage technologies that it purchased several years ago including SecureWorks and SonicWall as well as the security offerings from Quest and Credant.  For systems management, again Dell will leverage the depth of technology from the many acquisitions that Quest made over the years, the Wyse technologies, KACE, and AppAssure.  For information management, Boomi integration software is going to play an important role both for on premise environment and within cloud environments.  Dell’s biggest software acquisition, Quest has a huge portfolio of software that will take some time for Dell to incorporate into its platform.

But clearly this massive amount of software is not monolithic.  Dell will take advantage of its security management capabilities as an underlying support infrastructure for its emerging mobility strategy.  In addition, Dell intends to leverage its security capabilities for client side data encryption and firewalls to protect mobile data.  Like many competitors in the market, Dell is focusing tremendous energy on the cloud market.  Again, leveraging its desktop heritage, Dell is hoping its Desktop, as a Service offerings will be attractive to customers moving to the cloud.  In addition, Bring Your Own Device (BYOD) is becoming an important element of Dell’s security strategy that is increasingly important headache for IT organizations.

The strategy is clearly ambitious.  The ability to unify the elements of software into a well-architected environment is complicated.  Dell will have to demonstrate that it can add the types of standards based interfaces so that software components can be linked together to create solutions for customers.  Dell has the opportunity to try to differentiate itself by focusing on the mid-market rather than focusing on the high end of the market.  The mid-market has long been a complicated market for companies to leverage. Ironically, mid-market companies have the same complex problems to solve as the very large companies – with smaller budgets.   If Dell can create and deliver modular and flexible software that solves complex problems  more easily it will have an opportunity to emerge as a player in this very competitive market.

Judith Hurwitz , , , , ,
About Judith Hurwitz

Judith Hurwitz is an author, speaker and business technology consultant with decades of experience.

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