What is Dell’s IT service?

On Jim Citrin’s “Dell Gets Back to Basics”, Michael Dell’s reply to “What's the greatest single problem with IT today?” was “Simplifying the way companies use information technology (IT).” Apparently, Dell is emphatically paying more attention on value-added IT services.  After all, the priority at Dell is to grow solidly along with decent profits. To supplant HP as the world PC leader should be one of Dell's priorities to serve this goal.

However, Simplifying IT complexity could be one of approaches on IT services. Will it contribute the most for Dell? Does Dell simply leverage the domain knowledge on leading-edge supply chain management? Or the iPod model inspires to get back to basics?  It will be an interesting argument.

IT Legacy: Existing Customers on Old Infrastructures 

Indeed, the IT infrastructure is extremely complicated in US. Try to imagine how the technology evolves on both software and hardware in the past few decades. Most of current investments are spent to enhance IT functions on top of previous infrastructures that may require more patches to soothe the compatibility issues. It consequently introduces more services on upgrade, maintenance, integration, administration, and support under predictable time frames. The so-called IT services create more solutions, which may evolve into possible future nightmares, to bridge today’s technology with yesterday’s legacy with more software investment. Later on, to integrate tomorrow’s innovation with today’s heritage is for sure unless we can totally toss the IT legacy away.

From the legacy-burden perspective, IT simplification is a piece of good news. The question is how Dell is going to simplify competitor-built legacies without knowing associated core competencies, or how to effectively take the sizable slice of the market pie from competitors.

For the emerging market like China, legacy issues should be a lot mitigated. For instance, the operating systems should be well covered as long as you support both Windows and Linux in China where simply utilizes any cutting-edge products with very limited technology evolution.

Non-legacy Services: Core Competencies + Simpler IT Integration

For any brand new services requiring latest technologies, the IT services will be strongly bundled with application-specific solutions that unequivocally demands suitable core technologies.  To leverage core competencies as competitive advantages is inevitable. The Chances favor prepared minds that have systematically established the conventional wisdom to possess broader core competencies. The modern mindset on simpler IT dynamically adds values from hearing customers’ voices.

Here are some typical IT services associated with main players who do own core competencies.

• Enterprise computing: IBM, HP, NCR-Teradata, Oracle, etc.
• Vertical integration from IC design service to software solution: IBM and Fujitsu (both have foundries and software teams). The typical cases include IBM’s RFID solution at Wal-Mart, and toll system in Stockholm.
• Data Center: IBM, HP, Dell, EMC, etc.
• Manufacturing-ERP integration: IBM provides services for TSMC, and HP for UMC.

All aforementioned IT services fully leverage hardware platforms (PC, server, workstation) along with their core competencies to deliver software integrated solutions. For instance, IBM and HP are pretty good at data warehousing and data mining associated with enterprise computing. IBM owns enormous IP portfolios on IC to well integrate industry-specific vertical solutions such as SoC (System-on-Chip) design services for data communication companies.

Mentality

The fundamental mentality is to leverage up-to-date technologies and management to deal with existing environments and to plan for future compatibilities.

From market point of view, the catch of IT simplification should have the different mentality to work with companies in US and China respectively. In a nutshell, more legacies exist in the developed countries, and less in developing regions.

From implementation standpoint, the basics of IT services should reuse and share the well-established core competencies that should contain IP, integration prowess, innovative logistics management, or combination. IT simplification should be articulated during the architecture design stage in the very early beginning.

Time to Make Changes

So far, it may not be completely clear for what Dell’s simpler IT means. Or what is Dell’s IT service? But the good news is that Dell is making a change, if necessary, to make the difference again.

As Michael Dell said "The direct model has been a revolution, but it is not a religion”, the direct model may not be a panacea for all regions in all times. The similar statement to reassess the conventional IT services could be the same case. Of course, it should be great to see Dell innovate another surprise in the near future.