Jeff Clark, Dell’s vice-chairman, Products & Operations taking industry analysts through the PC strategy
“As a service” has become all the rage these days, whether it is with ridesharing (Uber and Lyft), grocery shopping (Instacart), home improvement (HomeAdvisor), and of course, datacenters as a service (Amazon.com AWS, Microsoft Azure, Google GCP, IBM Cloud). We all know Dell for its PCs, but recently services have increasingly become a differentiator for the company. I covered Dell’s unique ProSupport a few years back which leveraged big data and IoT approaches for predictive maintenance which was and still is very cutting-edge. Dell Technologies recently announced an expansion to its PC-as-a-Service (PCaaS) offerings, which I wanted to offer my take on. Before I jump into the services realm though, I wanted to say a few things about Dell’s recent PC performance as when I attended the company’s analyst day recently in New York City; I walked away with a few nuggets.
Dell’s PC business doing great
Dell’s Q2 PC financials showed us several impressive things. First, the company’s global PC share grew for the 18th consecutive quarter (from 15.9% to 17%), and Dell’s overall shipments grew 3.7% year-over-year (aided in part by an unusually strong notebook showing). While not the #1 unit share lead, Dell does lead in commercial revenue share. The other big news is that Dell managed to surpass HP Inc. to reclaim the number 1 position in total global workstations share. All of this to say that while Dell’s services are gaining significant traction and becoming increasingly important to the company, its PC segment is kicking high. Now onto services.
Upgrading PCaaS with new features
On to Dell’s first big piece of news—an expansion to its PC-as-a-Service (PCaaS) offerings. For those unfamiliar, PCaaS aims to simplify and speed up IT management by providing a comprehensive, end-to-end solution (hardware, software, lifecycle services, and financing) for businesses. Don’t confuse this with financing- it is a lot more than that. By freeing up the resources, this lets IT invest in more transformational projects like mobility and IoT.
Dell takes care of everything, from deployment to eventual asset recovery of used equipment. Dell says this significantly reduces the burden and cost of businesses’ digital transformation (with some research showing as much as 25% savings). This number makes perfect sense to me, and I could see that number going higher when you factor in multi-year PC management.
Dell's PCaaS construct
I see this as not only a useful service but one that plays to Dell’s strength in the PC sector—keeping Dell’s latest and best computers in the hands of customers. It also enables IT to deploy resources on more strategic, transformative projects versus the management of devices which, albeit important, is quite tactical.
Dell announced last week that it would be adding several new standard features to PCaaS. First, every engagement will come with a Service Delivery Manager, who will serve as the customer’s single point of contact throughout the entire PCaaS term—beginning to end. Dell says this will improve customer experience and provide a deeper level of services engagement. Secondly, Dell Financial Services (DFS) will now be offering Flexible Financing options for PCaaS—customers can flex the number of systems they use, or upgrade their PCs mid-term with the 36 and 48-month term options. These are good features to add—businesses’ wants and needs can change drastically over that length of time, and flexibility within the service is crucial. I would like to see even shorter time periods for those executives and key individuals who really want that new device every year. The last new feature Dell announced is the addition of asset recovery into the standard, not optional PCaaS offering. This service will make it easier to return old equipment to Dell, and, keeping security in mind, also includes an option for an on-site data wipe.
In addition to these new features, Dell is also expanding the security software options for PCaaS customers, to include Dell Endpoint Security Suite Enterprise, VMware AirWatch, and Absolute Data and Device Security. It is easy to see how all this helps PCaaS. I see all of these announcements as helpful additions to an already good service.
AirWatch Windows 10 Provisioning
The other big announcement was that Dell is introducing Windows 10 Provisioning by VMware AirWatch, which the company says will simplify deployment and guarantee zero-touch provisioning of Dell’s PC line. The unified endpoint management technology can reduce stumbling blocks between ordering and getting PCs deployed and up-and-running, by offering customers various self-service options: the ability to download approved applications and reset passwords, as well as better visibility during device configuration. Another bonus is that AirWatch integrates with the Dell Client Command Suite, which allows customers to configure, change, and update firmware settings via the cloud in real-time. Dell’s zero-touch provisioning strategy promises to make things easier on both IT teams and end-users, and I think these new announcements will be a helpful contribution to those capabilities.
From an industry standpoint, this is just the beginning of PCaaS. In the future, I expect some hardware companies to make their systems less reliable as they only must last two years. Some hardware companies will make their systems more reliable as they can redeploy systems to other regions or to customers who do not need a modern PC. I also expect some degree of modularity where IT can swap in and out a module with CPU, GPU, and memory so the chassis can be used longer.
All in all, I see the expansion of Dell’s PCaaS capabilities as a plus—I think the new Service Delivery Managers will help streamline and improve customer experience, and the added flexibility in financing will make the service that much more desirable to potential customers. I think the zero-touch capabilities provided by Windows 10 Provisioning by AirWatch and the Dell Client Command Suite will also be appealing to potential customers. Whether we are looking at PCs, services, or PCs-as-a-Service, Dell’s client division is clearly firing on all cylinders. I expect we will see Dell continue to keep a solid grip on its PC segment, while services will continue to grow and improve—I’ll be watching with interest.
Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights) in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.