Dell partners on ‘commoditised’ services

Dell partners on ‘commoditised’ services

DELL is bringing its direct business model to the services sector, by using partners Unisys and NCR.

Newly-appointed Dell New Zealand manager Derek Leitch says ICT services are “ripe for commoditisation”, which Dell intends delivering here by the same model recently launched in Australia.

Dell Professional Services will offer enterprise-class products and solutions such as design, project management, architecture, consulting, ongoing services and support while Dell Managed Services concerns fleet management, procurement, deployment, helpdesk services and the asset lifecycle.

Dell claims to be able to offer massive services discounts, in the order of 60% for lifecycle management and break/fix costs and 45% for SAN implementation.

Dell claims services are the fastest growing part of its business, with 70% year-on-year growth.

The global services market is estimated at $US800 billion a year of which the company claims a 2% share.

Leitch says Dell was not offering high-end consultancy but rather “close to the box” services.

Such services would involve customers choosing from a menu of services within a “standard operating environment”.

The services would be delivered using Dell’s sales staff and consultants, plus logistics staff in Auckland, Wellington and Christchurch.

Dell can also count on 75 vendor-trained Unisys and NCR staff across New Zealand.

“It’s all around a leveraged partner model. Our customers don’t want us to own 75 engineers but when they want it, they want us to turn the tap on,” Leitch says.

IDC New Zealand manager Graeme Muller says the partnership model will help Dell compete with HP, by providing a wider range of services than it could alone.

The New Zealand services market is worth $1.9 billion, of which 45% is outsourcing, 45% consulting and integration and 10% in deployment and support, IDC says.

Dell might be able to get much of this latter market, but this was only a small part of the total services market and Dell’s own strong growth rate suggested it came from a small base.

IDC believes there is more growth in the high value end of the IT services market, especially around network management, outsourcing and integration services.

Nontheless, Dell “is correct that areas of IT appear to be ripe for commoditisation, and we are beginning to see the emergence of utility services in these areas, such as storage services”, Muller says.

“It is moving in the right direction,” he says.

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