How a private Dell works with customers, and sees its rivals

Dell isn't in search of dramatic innovation, and therein lies the risk for the new version of the company

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Like their counterparts at other vendors, Dell executives repeatedly emphasize customer focus. But where Dell differs from rivals is in the way it interprets what customers may need in the long term, and therein lies a potential risk for the company.

If Dell is working on technologies that could lead to very new things, it's being quiet about it. But its rivals aren't shying away from publicity. IBM, for instance, is heavily invested in cognitive computing, human-like artificial intelligence systems. It also has a research effort in quantum computing.

For its part, Hewlett-Packard just announced that it's developing a new computing architecture it has dubbed the "Machine," based on a new nonvolatile memory technology (no electricity is needed, similar to flash), called memristor, that can hold more data and move it much faster. The system also uses silicon photonics as the communications technology, and a new operating system. It could bring enormous computing power to a small box, says HP.

A Dell official called HP's new architecture "laughable" shortly after it was announced and faulted the approach for a number of reasons, including its need for a new operating system and problems it could create for existing business software.

Dell executives say they will do better by concentrating on the more direct needs of their customers.

"We prescribe more to the practical side of the innovation house than try to grab headlines," said Marius Haas, Dell's chief commercial officer and president of the company's enterprise solutions operation. "We focus more on what's going to deliver value to customers near term, short term, versus a hypothetical machine that might evolve over 10 years."

Dell emphasizes strong partnerships with the major independent software vendors, particularly in development of engineered systems or appliances that integrate computing, storage and networking to simplify deployment.

The development of new analytics tools that can be broadly used by employees in a company is also an important product direction. One of the reasons Dell acquired StatSoft in March was to bolster its work in that area.

"With the acquisition of StatSoft, we gained a lot of staff -- very qualified staff -- across the world," Matt Wolken, general manager, information management products in the Dell Software Group.

Charles King, an analyst at Pund-IT, sees potential for Dell to become more creative now that's private. "I wouldn't be surprised to see Dell try new, potentially riskier things that would never pass muster with financial analysts, like making bets on emerging markets, developing offbeat products or exploring unusual service solutions and engagements," he said.

The biggest negative for Dell as a private firm "is probably the lack of transparency customers have into private companies," said King, noting that that's "an issue Dell competitors, including HP, have been trying to exploit."

But King said the transparency issue is "more than a little overblown," and noted that there many successful private IT companies.

Ryan Hayes, IT manager at Park City Mountain Resort, uses Dell blades to run the computer systems at the 3,300-acre Utah ski resort. He says Dell's privatization had no impact on him, or on his Dell account team, which was particularly important.

Hayes said the only difference he has noticed since Dell went private is that the end of the quarter isn't as important as it once was.

When Dell was a public company, he said, "you knew it was the Dell end of quarter, you knew as a customer."

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His email address is pthibodeau@computerworld.com.

See more by Patrick Thibodeau on Computerworld.com.

Copyright © 2014 IDG Communications, Inc.

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