Ann All

Dell's SMB Services Strategy

Dell is trying to make a new expansion into services a key part of its “Dell 2.0” business transformation effort. Read Ann's insight into Dell's SMB services strategy.

When I wrote about Dell's SMB-oriented product lines in July, I noted that several experts stressed that Dell would also need to beef up its service offerings if it hoped to expand its SMB business.

Indeed, according to a recent Forbes article, Dell should focus narrowly on SMB services, as it really can't hope to compete with IBM or HP for big service contracts with larger companies. Dell’s service business suffered an embarrassing setback in 2006 when Philips canceled a five-year deal in which Dell would have managed desktop PCs for 75,000 users.

Under prodigal CEO Michael Dell and CIO Steve Schuckenbrock, an EDS veteran who joined Dell last year, the company has been busy acquiring companies that it thinks can help it woo SMBs. Among them: remote monitoring specialist Silverback Technologies, storage company EqualLogic and e-mail management provider MessageOne. Says Schuckenbrock:

If you look at the types of services we’re investing in, its all about remote infrastructure management and software as a service.

Schuckenbrock also sees an opportunity in recruiting systems integrators who are leery of working with companies like HP because they fear their supplier might try to poach their biggest and most promising SMB accounts. Some experts agree. Says Lindy Hanson, a senior analyst for Technology Business Research:

The EDSs and the HPs and the IBMs go after the big outsourcing deals and haven’t really found a way to make the SMB market fit into that model.

HP was probably thinking of big potential clients, not small ones, when it recently agreed to pay $13.9 billion to purchase EDS.

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