Solution providers say they plan to keep a close watch as Dell seeks to extend its offerings in on-site IT support and repair services.
As part of that evolving strategy, Dell is talking to potential partners, including Reliable IT, Springfield, Va.; OnForce, New York; and ServicePower, Louisville, Ky., according to executives familiar with the discussions.
Reliable IT, by working through the OnForce Web-based services exchange, can orchestrate nationwide IT services. ServicePower is a field logistics automation company that optimizes the scheduling and deployment of field service calls.
Dell declined to comment on the matter. However, a source familiar with Dell’s plans said the Round Rock, Texas-based computer giant is “very serious” about finding new ways to add revenue through services.
Several VARs said Dell’s services partnership discussions--combined with its intention to provide an integrated appliance platform for managed services--are worth monitoring.
“You take Dell’s MSP plans with the appliance, you add Reliable IT, and what you have is the makings of a buy-it-by-the-click type [of] services offering. And yes, it’s absolutely a threat,” said Jon Whitlock, vice president of marketing development at CBE Technologies, an MSP and Reliable IT customer in Boston.
Solution providers generally have the advantage of local presence, Whitlock said. Still, there’s reason to worry because “with the muscle and financial backing Dell has, they can make quite a splash in services and create a single point of contact for almost any IT need,” he said.
But Rob Pennoyer, lead consultant at GG Group, New York, an MSP to businesses with between 10 and 100 employees, said people don’t look to Dell for services.
“Dell services? I know customers who don’t even know Dell makes servers, let alone offers services,” Pennoyer said.
Scott Shaul, president and CEO of Reliable IT, said partnering with his company could give Dell a comprehensive IT services reach. “They definitely want to run a test with us in certain territories,” he said.
Reliable IT’s relationship with OnForce, whose services exchange enables regional VARs to find services partners in other areas of the country, would be key to any Dell partnership, Shaul said. “If you put OnForce and Reliable together, it’s one of the largest Dell technical forces out there. ... It’s probably [more than] 1,500 Dell-certified technicians,” he said.
Dell is looking to deliver services at low, fixed prices by working directly with customers and reducing transaction costs that sap profit, according to Shaul. Whitlock said CBE typically marks up Reliable IT’s services pricing by up to 30 percent.
Former Hewlett-Packard channel chief Kevin Gilroy, who in January was named senior vice president of sales and general manager of OnForce, said his company has discussed its services deployment model with a number of OEMs. However, Gilroy declined to provide details. OnForce said it has more than 12,000 nationwide service providers at its disposal for projects.
Chris Smith, CEO of ServicePower Field Service Solutions, confirmed that he has discussed services strategies with Dell. His company's hook is providing better resource management for services jobs.
“How we fit together with Reliable is we have an artificial-intelligence-based routing solution. We allow field technicians who might do three or four jobs a day to do seven or eight jobs a day,” Smith said.
Dell has long said it needs to increase services revenue. During an earnings call in February, CEO Kevin Rollins said news of changes to Dell’s business model could come in April.
Last Thursday, Dell unveiled a deal to partner with Lexmark to provide print managed services to aerospace giant Boeing. The arrangement builds on a five-year managed services pact with Boeing that Dell inked in 2003.
The Boeing deal follows through on a promise by a top Dell executive that the vendor would enter the print managed services arena. Last month, Joseph Marengi, senior vice president of Dell Americas, said at a Morgan Stanley conference that Dell plans to roll out a printer managed service offering. And several weeks later, news emerged that Dell is mulling plans to sell an OEM appliance that provides an inexpensive way to offer managed services.