Dell's John Moody: Adding VMware's AirWatch To PCaaS Helps Dell Stay More Flexible, Predictable Than HP, Lenovo

Getting A Leg Up

Dell Technologies is moving to take advantage of its easy access to VMware engineering, folding the virtualization kingpin's AirWatch solution into its five-month-old PC-as-a-Service (PCaas) offering along with other new services and financing options introduced today.

John Moody, Dell Technologies vice president of global client support and deployment services, said the addition of AirWatch management, as well as delivery management, lifecycle services, and flexible financing options, are aimed at larger customers and at gaining an advantage over PCaaS competitors like HP Inc. and Lenovo.

AirWatch is being deployed on PCs at the factory so they'll get to end users customized and with policies set. "When that unit is then deployed out in the field, the management of those devices is already there and working at the point when the customer end-user actually flips it open and starts using it," Moody said.

The additions to the PCaaS offering include Services Delivery Manager, which provides customers with a single point of contact from planning through the contract's end; flexible financing that gives customers the option to increase the number of systems or upgrade PCs during the term of the deal; and complete lifecycle services.

What follows is an edited excerpt of Moody's conversation with CRN.

Does having VMware as part of the Dell Technologies family provide Dell with any particular advantage, or is it just the same as doing PC-as-a-Service on HP or Lenovo?

It absolutely gives us an advantage. In the 'fat client' world, the Dell Command Suite tools allow customers to go through their network and bulk manage BIOS pushes and data wipes and things like that as they're on the network. Now, we've integrated AirWatch and Dell Command Suite directly together, so at the BIOS level, you can use AirWatch to manipulate assets at the BIOS level. The ability for AirWatch to handle a lot of this stuff, and the integration we're doing between VMware and Dell EMC assets is very free-flowing. I feel like I have all these developers working with me that I've never had before. They're working on managed capabilities I need to take my foundational ProSupport and TechAssist tools for support and deployment and expand those bubbles in a connected and seamless way and being gobbling up and automating those management tasks. This allows me to do that. What's really different is that joint engineering between AirWatch and Dell Command Suite. As separate companies we might have been able to do it, but not that fast. Having that one console to be able to manage stuff at the firmware level is really big.

How does this help Dell in a very challenging PC market?

When you look at the velocity of change that's coming from a software perspective, I think it's really big because it's the only way we're going to help our channel partners and our customers deal with this added velocity. Change in our world around the client and helping our customers and channel partners focus more of our energy around strategy and high-value-add change and removing those repetitive tasks from their world is how they survive. That's how we've always been able to survive in this world, by moving to an automated, lower-cost answer.

What's the best way for partners to make money on PCaaS?

This is all ready to go for resale. A lot of our channel partners are more focused on the consultative side and they don't have the global scale in particular areas, and this allows us to attack those areas with them hand-in-hand without stepping on each others' toes. With the modular aspect of these, if they make all their money on deployment, that's what they do, the modular capability of this allows them to do the things they want to do, and we cover the things they don't want to do or don't have the scale for. It's that flexibility for the channel partner that works incredibly well.

So partners can pick and choose which services and support they provide?

I think we've been very clear with our direct business and our channel business that we want to work with you where you're at. When we develop services and tools, we want to make sure that they're available to both parties. TechDirect is a great example. A channel partner can do a one-to-many management capability. They're looking at order deployment, they're submitting the customer images, they're setting BIOS settings for the customer, and the customer doesn't see any of that. For the channel partners that do resale, they can actually use that tool where the customer is doing all of that, and the channel partner is not burdened with managing the customer at that level. We do it for them.

Where is PC-as-a-Service gaining traction with the channel?

It's larger customers. The majority of the interest – and the market is stirring this up a lot so it's become a buzzword – is those large businesses, and that's why we're focusing on 500 units and above. It gets everybody to talk about the whole solution, the whole lifecycle. It's not about the components, but the time, the lifecycle and what could happen to it all during that lifecycle, and therefore what does the entire solution need to look like? What does the total cost of ownership look like? What are the best of breed tactics of being automated and making sure you're consistent in your activities across the globe? It's a great conversation to have with these bigger customers because the world is very complex and there are typically more worried about the security of their infrastructure and their data and their data centers and their networks. They just expect their clients to work. The reality is if you're not doing some really basic things, that can be challenging.

How do partners navigate the financing aspect of these deals? Do partners get paid up front by DFS, and the customers make monthly payments to DFS?

Exactly. As far as the partner is considered, there is no difference between PC-as-a-Service and a capital buy. They may do some things separately themselves that aren't part of that, but in their eyes, they're paid on it like a normal capital sale. The DFS transaction is separate, and ownership lays with them. That's the benefit of it to both the channel partner and the customer. They're looking for that predictable cash flow.

What's the term, and why not offer a pay-as-you-go consumption-based model?

The term is three or four years. We can do some things to customize that, but three or four years really meets the fat of the bat in terms of what customers are looking for. We've had people ask us if customers want totally pay-by-the-drink, purely consumptive models, and the answer is no. Our customers came back and quite clearly said that they want a commitment from us for a term because they don't want us to disappear in the middle of it, not that we would. They're just as concerned about their investment in this and the stability of it as we are. Some think they can live in a consumptive model, but I don't think they're totally thinking through the chaos of what that model looks like.

Is there a big opportunity for partners here toward the end of the term, whether it's in selling renewals, or a whole new deployment?

Absolutely. The key is because the customer's plan for this up front, they can make all kinds of decisions on what to do with those assets. How do they want them treated? How do you make sure it's secured? How do I make sure the data's been wiped, or crushed or whatever they want done? Do they want to make a charitable contribution with these? What do I want done with that value? DFS can help make that determination way, way ahead of time. When it's time to end-of-life them, there isn't any decision to be made. We know exactly what their desires are, and it's built into the financing from the very beginning. There are no surprises.

And if the partner has played his cards right, it's an opportunity to go all-new?

That's exactly right. It also gives the channel partner all of those other interesting aspects. Have they done that consultative push around the fact that it's coming up in six months? How do you want to begin the transition? Did you flex up, or flex down? You used mid-term upgrades, or you didn't. How much flexibility do you need in the future? Do you want to recycle this technology and move along the same path, or do we need to steer the path because of something that's going on in your industry? It allows for a really well-timed discussion with the customer about what's really going on in their business as opposed to a very narrow discussion about technology only, which is always a mistake.

What are you seeing from competitors in this space? Both HP Inc. and Lenovo have PC-as-a-Service offerings.

We’re seeing them continue to push the messaging around this pretty significantly, especially HP. We're feeling pretty good, because we're seeing HP, in particular, go from a very confusing support offering, to a much more simplistic model. It's still a little confusing, but it's more of a good-better-best offering on the support side. It's still difficult to tell what they're planning on doing on the deployment side. It's still a little hazy when you go through their materials. Part of that, I think, is because they don't have the same globally scaled and standardized deployment offerings that we have. Both Lenovo and HP are going at this thing. Most analysts are telling us globally this is somewhere in the below 5 percent market digits today, but they're expecting it to be 20 percent of the market in three to five years. I expect it to grow. I think the conversation is spectacular. The software and the data are requiring us to think further down the road than most of our customers are used to.

Why was it important to allow for flexibility in the PCaaS financing model?

We've built in the ability to flex up in volume without recreating the wheel; to flex down by 5, 10 or 15 percent within the 36- or 48-month term option. It's a choice the customer makes ahead of time, based on long-term planning, as opposed to a standard lease where that's just it. You'd have to kind of scrap it and start all over. It's instead of doing that or being stuck with stuff you don't want. With the mid-term upgrades in here, you start talking about customers being able to upgrade their high-use employees who need to be on that edge all the time, or your executives that want that latest and greatest thing. You're able to add units at any time during the contract term.

What benefits will customers see in the new PCaaS deployment, services, and support offerings?

PC-as-a-Services drives a conversation with the customer beyond just the procurement of hardware. It's important to make sure they've thought about the best of breed for how you deploy, the best of breed for how you manage this, the best of breed for how you support it and have you thought about what you're going to do when it's done? That allows them to actually manage their total cost of ownership. It creates a conversation with the customer and with our channel partners that just wasn't robust enough in the past. It's not that the components are particularly brand new, but we're making our PC-as-a-Service offer more flexible and more predictable than our competitors are.

What drove the decision to fold VMware AirWatch into the PCaaS solution?

Software allows us to do things in an automated fashion that we've never been able to do before, and Microsoft and Windows 10 is driving us toward a higher velocity of change in the Windows environment than we've had to digest in the past. We now have tools with VMware AirWatch that are going to allow us to manage those PCs better than we ever have. Frankly, in a multi-vendor perspective, in a multi-format perspective, AirWatch allows our customers to manage things much more broadly than I would be able to as just a PC guy.

How is that achieved?

If I take the automated deployment capabilities that I already have, now they can actually deploy AirWatch down onto the unit, set policies and customize it in the factory. When that unit is then deployed out in the field, the management of those devices is already there and working at the point when the customer end-user actually flips it open and starts using it. Policies can be enforced, data migrations can begin happening. Because I loaded the majority of the image in the software, I don't have this huge over-the-wire update that has to occur that drags work down and takes forever. The images are still too big for this concept that some have that we can do this stuff over the air. The reality is that you can, if you want to wait two days. Peoples' networks are just not there yet.

And AirWatch takes that out of the equation?

AirWatch simplifies the deployment, and the experience is a way that allows us to bring our factory and second-touch economies of scale and expertise and cost as close to that end-user as possible. Ultimately, we want customers not to have to buy the computer, send it all to a place at their headquarters where they have a whole bunch of expensive burn racks where they scrape everything and re-burn them and then have a great diaspora where they all go out to wherever they belong because we're so mobile now. There's really no need for that. You should be able to do all of that in the factory and send them straight out to the end-users.