Dell: Service Is Key Focus For 2003

The vendor has cut the cost of services it offers by an average of 40 percent to 50 percent, Dell said, adding the company will press forward with innovative services offerings over the next year, he said.

"We are creating a new kind of services model,one that is based on semicustom services, one that is really focused on value and [on driving costs out," he said.

However, solution providers do not seem concerned about the potential services threat from Dell.

Dhruv Gulati, executive vice president of Lilien Systems, a solution provider in Mill Valley, Calif., said anyone with enough money can build a service organization.

Like Dell, Lilien offers fixed-price, prepackaged services for Microsoft Exchange, Oracle and SANs, among other offerings, Gulati said. "[Dell has a good model, certainly, one that [it may have used in the SMB space," he said. "But my enterprise customers are not using Dell services."

Rob Didlake, president and owner of Dataedge Solutions, said the Wichita, Kan.-based solution provider used Dell servers as the base for storage appliances for customers but discontinued the practice last year because Dell's service was inadequate.

The vast majority of services growth at his company will be organic, Dell said, although he did not rule out acquisitions. Earlier this year, the company bought Plural, a Microsoft solution provider that Dell rolled into its services organization.

Dell said his company is selling prepackaged fixed-price services at rates from $15,000 to $50,000 and is employing some of the same efficiencies in the services business that the company used to drive down server and PC prices. "The semicustom services can be redeployed time and time again, so there is actually some intellectual property that gets created, and it is a repeatable process," he said.