Dell turns to services

Dell has launched a new desktop services strategy aimed at competing with the big outsourcers which it claims can cut firms' costs by up to 25 per cent.

The PC manufacturer has pulled together many of its point services into four broader service packages as part of the Dell Managed Services brand, ranging from consulting to full desktop outsourcing.

The 'lifecycle assessment' and 'asset discovery' service components are essentially consulting packages aimed at assessing a firm's current desktop inventory and making recommendations for future strategy in both hardware and software.

Managed deployment will offer services around desktop upgrades and replacements, while the fourth component, 'managed client services' is a combination of the other packages as a full desktop outsourcing service.

Josh Claman, VP of services at Dell, told silicon.com the services market at desktop level had become sufficiently commoditised for Dell to be able to compete effectively with the more established and market-leading players such as IBM, EDS, Hewlett Packard and Computacenter.

"IT services we saw coming down the 's-curve' – much more standardised and much more commoditised and that is where Dell can bring to bear a lot of its expertise," he said.

He dismissed analyst observations that Dell will find the transition from commodity PC manufacturer to service provider a difficult one.

"This is obviously our bet that we can control it as well as the same level of operational execution on the services side as we do on the hardware side. And if you look at the model it is very similar. We deliver most of our service to partners. We manage the supply chain, we manage available capacity in the IT services market and utilise our management capability there to drive better value for our customers" he said.

Claman said cost savings for users will vary according to whether it is a simple desktop refresh or a complete standardisation project, but claimed "typically" customers are achieving savings of "20 to 25 per cent".

The new services package was launched operationally at the beginning of this year but has been kept low-profile while new customers road-test the offerings. Claman said a recent win includes an unnamed 100,000 seat worldwide organisation.

Dell services currently accounts for $4bn of the company's $35bn revenue, although Claman admitted most of that is from 'close to the box' basic services such as warranties. He predicted services will have to become a much bigger part of Dell's income in the future.

"Services is absolutely a core focus for Dell going forward. That's where we see a lot of our growth coming from."

Peter Abrahams, practice leader at analyst Bloor Research, said it is an obvious move for Dell to get more out of its existing customers but that it will be difficult to break into non-Dell shops with these services.

"It is something Dell should do because other people are offering that sort of service but not necessarily with Dell hardware, so it is another channel to market for Dell. It is worth it just to protect those existing Dell clients but if I was a corporate not using Dell this announcement is not likely to make me change my mind," he said.