Dell’s Marketing Strategy

dells marketing strategy In the realm of attempt IT, dell is often scaned as having a singular strategy-build and sell products cheaper and to a greater extent(prenominal) efficiently than competitors, and thereby grow both market share and revenue. plot that deceptively simple plan lies at the heart of dells approach for customers, its overall distributeing strategy, like its presence in the enterprisingness market, it maturing, growing stronger and becoming more complex with each passing year. dingle has crystalized its long-run strategy for business customers in a resource it calls the ascendible effort, which has many another(prenominal) similarities with the dynamic cypher strategies of its competitorsIBM (On Demand), Hewlett-Packard (Adaptive enterprisingness), and so forth. ascendible initiative is come to on dingle products, serve and alliancesall of which are rooted in industry standards and cloaked in the famous dingle localize model. The alliance has been promoting and marketing this vision for only a few age, but it has rapidly become a focal point for how Dell rationalizes its product and run roadmaps.And it intersects with Dells overall view that the industry provide quell to leverage clusters of high-performance, industry-standard servers and operating environments, and incline away from larger-scale, proprietary systems. More important, the ascendible Enterprise vision also gives Dell a method for speechmaking with customers ab turn up its overall value proffer, and how it can help customers migrate to the long-term dynamic computing vision.Dells Services employees, in particular schoolmaster function, play a critical role in evangelizing the value of the ascendable Enterprise and in engaging customers in discussions as to how to make the vision real in their IT environments. Dell has never aspired to grow its professional serve business to rival those of IBM Global Services (IGS) or the global systems integ rators (GSIs). However, the gild does recognize that operates are a linchpin for helping customers utilize Dell products to address both their IT and their business challenges, and convincing them that Dells products and solutions are truly effort-class.To that end, Dell has refocused its professional serve portfolio (and its entire work roster), placing overall customer satis particularion, lifecycle operate and the ascendible 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, establish on data from a deep 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 some of Dells newer offerings. We conclude with suggestions about steps Dell can conin par ticular with enterprise services partnersto further enhance its professional services strategy and spread its Scalable Enterprise vision throughout the market. We first explored Dells services strategy two 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 ahead in enterprise services. At that time, many of Dells executives were concerned that customers did not view the company as a strategical enterprise vendor, or thought that Dell lacked enterprise-level expertise for designing and deploying IT environments. What a difference two years can make. We recently asked IT buyersenterprise and SMBto happen upon their approximately strategic IT vendors, both for overall IT strategy and in a variety of different IT areas, including infrastructure software and implementation and mount.As shown in picture 1, when we asked all respondents how important various vendors would be to their organizations overall IT strategy during the close 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), visionary, fair weather Microsystems, SAP, and some global integrators and outsourcers. Another 28% named Dell as angiotensin-converting enzyme(a) of their top two or three most strategic vendors.In other survey data point, among large enterprise customers (with 1,000 or more employees), Dell ranked as the fifth most strategic vendor (20%), with Oracle moving ahead of Dell. The news was even rectify 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 p riority.While these two data points do not directly relate to the robustness of Dells services capabilities, they do demonstrate that Dells profile as a provider of enterprise-caliber solutions has g maven 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 determined fourth among total respondentsagain behind Microsoft, Cisco and IBMand fifth among enterprise respondents.Its also clear that Dells contention that lower-cost, standards based systems can handle IT functions previously reserved for higher-end, proprietary systems is resonating 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 indicate about a linkage. The momentum is helping propel Dell and its Scalable Enterprise st rategy into a placeership 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 lay off 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 framework.This framework tightly aligns IT and business goals through the use of new infrastructure components and virtualization capabilities, automated 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 mould the major infrastructure soft ware, management and business process challenges of the dynamic computing equation (although some Dell-developed management capabilities are becoming increasingly strategic for the vendor).IBM and, to a lesser degree HP, talk to customers about their ability 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 cardinal 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 full actualisation until 2008, when the company plans to deliver more automated policy-based capabilities, self-monitoring tools and dynamic res ource apportioning for heterogeneous systems. Of course IBM, HP and others would say they can provide a greater array of dynamic computing solutions now, and that customers have no pack 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 leveraging 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 move 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 little incertitude about services overall importance to Dell. Services currently refund 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 biennial period, with significant growth in both the U. S. and overseas markets.As referenced previously, Dells services reflect the companys overall ism 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.