Server biz-Dell's strategic value proposition for its customers.
Jim:
Here is an excellent article on Dell's strategy in the server business from the Aberdeen Group.It is lengthy but in depth.
So this is how it is done,eh? Well works for me.
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Courtesy:Aberdeen Group
Excerpts only
Dell Computer Corp.
One Dell Way
Round Rock, Texas 78682
www.dell.com/serversolutions/
NT Server Consolidation:
Dell's New Strategic Value Proposition for its Customers
Preface
Each day more Windows NT servers are deployed by IS executives looking for a scalable and cost-effective server environment. These customers want to improve NT scalability and robustness as quickly and as cost-effectively as possible, so that IS can drive a common standard beyond the workgroup and across the enterprise. This IS game plan is complicated by the growing need for better management of accompanying storage systems that store the crucial data that IS customers use for their businesses.
Among the major concerns many customers have had about large-scale NT implementations - concerns that Microsoft will be addressing through further improvements to NT - are often the proliferation of single-function NT servers and the resulting added costs and administrative complexity. And IS' need to integrate or migrate legacy non-NT servers into the NT environment makes for an even more complicated target enterprise architecture.
Dell Computer Corp. has carved out a place in the NT server market as one of its more reliable, efficient and cost-effective suppliers. Now, Dell applies that value proposition to the proliferation of NT servers. In this Profile, Aberdeen examines Dell's server consolidation strategy and evaluates its new services that seek to assist IS executives in achieving added NT scalability and robustness without unnecessary costs.
Executive Summary
IS executives know Dell for its trademark direct business model that has enabled customers to conduct many of their desktop and Intel server acquisitions over the Internet or via phone. What customers may not know is Dell also works directly with Fortune 500 accounts via face-to-face contact with account executives, systems consultants and system engineers. Much of Dell's attraction has been its ability to provide first-to-market technology plus competitive pricing and simple packaging. Another little-known fact is that Dell's server business has experienced explosive growth, making it a neck-and-neck contender for the second largest Intel server maker for the U.S. in 1998 by published estimates.
As Dell has grown, it has polled its customers on major hurdles that face IS executives over the next year or more. Some of the top concerns centered on administrators' abilities to consolidate server infrastructures as well as migrate and upgrade network operating systems. To address this, Dell is unveiling a multi-faceted approach to address both problems. Dell's strategy is to help customers consolidate NT servers, and assist in NOS migrations if a customer wants to accomplish that as well during the process.
The result provides IS executives with a strategy that combines Dell's Intel Architecture-based servers, services by Dell and partners, and an alliance with Microsoft to offer customers NT solutions. Key to this is Dell's alternative model of providing customers service and support through its own systems consultants as well as through partners that include Unisys, Wang and members of the "Big Five" consulting companies. This strategy may not be for everyone because of Dell's alternative means of delivering service and support that relies on Dell's single point of accountability, plus use of both its internal experts and those of partners to deliver support. Aberdeen stresses that NOS migrations can be particularly difficult without an in-depth understanding of both NT and Unix. Dell recognizes that and works with partners to address some of these major hurdles. Dell's services should be attractive for customers already savvy about implementing NT architectures or comfortable with Dell's approach.
The cornerstone of the strategy is Dell's next-generation business model of "virtual integration" that allows it to offer products and services with partners at more cost-effective rates than computer suppliers that base their business model on traditional value-chain models. This NT server consolidation and NOS migration strategy includes:
1. Virtual Integration to deliver services from Dell and partners;
2. Planning/Consulting programs (fee and no-fee) that focus on NOS migration and server consolidation issues associated with NT servers;
3. Custom engineering of hardware and application platforms at the factory;
4. Deployment services and maintenance through Dell and partners;
5. NT server platforms that are especially suited for server consolidation; and,
6. Alliance programs with Microsoft and other partners.
The clear take-away message is that Dell provides a program that allows customers to evaluate, plan, engineer, deploy, and maintain new NT servers to address a number of NT server consolidation and NOS migration issues. And Dell does it taking full advantage of its Direct Model of doing business, offering IS executives a price-competitive and efficient alternative means of meeting IS' strategic NT goals.
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This strategy starts with customers contacting a Dell account executive that provides basic evaluation tools to assess each customer's needs. Then, depending on whether the customer needs specialized consulting, Dell's in-house technical consultants, systems consultants and engineers as well as members of the "Big Five" consulting groups will help the IS manager plan a strategy for consolidating NT servers. Dell will also build the servers to exact customer specifications through the Dell Server Integration service, as well as assist in custom engineering of non-standard configurations and integration of PowerVault Storage. Additionally, through its Application Solution Centers, Dell provides customers with the ability to test and tune their in-house applications on Dell hardware in a controlled lab setting. Plus, Dell offers installation and maintenance services through Virtual Integration of Dell and its service partners, i.e., Unisys and Wang. Dell states that throughout the process it remains a single point of contact and accountability for IS executives through a custom solutions project office.
Dell's server consolidation strategy focuses on streamlining the process through which customers consolidate NT servers while at the same time offering IS the ability to conduct NOS migrations. This includes planning/consulting services, engineering services for hardware and software platforms, Intel Architecture (IA) servers, deployment services, and maintenance services through Dell and its partners.
From a professional service standpoint, Dell has focused on a number of areas to help customers reduce costs associated with a server consolidation program. These are:
1. Consulting Services;
2. Custom Engineering and Server Integration; and,
3. NT NOS migration consulting and evaluation.
Consulting Services - Planning a Strategy for NT Server Consolidation
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NOS Migration/Upgrade consulting;
Enterprise infrastructure review - review of current infrastructure and help with development of plans to standardize;
Strategic planning on collapsing NT Domain structures in preparation for NT 5.0;
Support for Email migration and consolidation - moving from multiple email packages to a single corporate standard Email and messaging platform like Microsoft Exchange;
Asset Management and Recovery via Dell Financial Services;
Assistance with Campus consolidations - moving from a decentralized LAN environment to a single LAN campus; and,
Support for deploying server and storage farms - centralizing management of servers and migrating to a Network-Attached Storage infrastructure.
Dell has also developed its "Dell SWAT Services" for IS managers who may not be ready for contracted consulting services but do need help with their consolidation programs. These customers often also have budget constraints limiting their ability to contract for Business Solutions. SWAT is meant to allow a customer to try consulting through Dell at no additional cost. These services provide presales technical consulting, help customers understand areas to consider during consolidation, and outline expectations and goals during the program. The program also helps customers clarify direction and sketch out solutions that allow customers to execute an NT server consolidation plan.
Custom Engineering and Server Integration
Once the planning process is underway, customers then must focus on calibrating the hardware and software for proper configurations prior to the actual deployment and implementation of the consolidation program. Here Dell has developed a number of methods to allow customers to test and validate configurations in preparation for deployment. Dell can provide a team of hardware and software test engineers and programmers to assist customers, with a single point of accountability at Dell. Once tests and validation are completed, Dell can manufacture servers with these requirements and deploy them for the customer. This adds to the streamlining of the deployment process, eliminating testing and validation of applications and hardware at the customer site and reducing the overall cost.
Dell also provides several Application Solution Centers that it has established jointly for Independent Software Providers (ISVs) and customers to test applications for the IA-32 and in the future the IA-64 platforms. These labs, one located in Texas and a second in Ireland, can configure servers to optimize performance by simulating workloads across clients and setting up network topographies to determine the right configuration for these servers. This allows customers to make changes before having servers shipped to their IT sites. As the complexity of applications increase, the need for testing environments such as this one will also increase.
Dell then can manufacture and ship the resulting servers. Dell states that this process allows for quick deployment to customer locations and smooth implementation because it involves less testing, validating, porting and configuring by IT personnel. DellPlus Server Integration programs also help test multiple hardware and software peripherals for customers, such as proprietary software, managed images, non-standard peripherals, NT domain addresses, and network topographies. Dell can add asset management tags at the factory to allow IS executives to keep better track of server inventories. Not only can Dell's Asset Recovery and Asset Management groups help customers eliminate old equipment as they consolidate down to fewer, more powerful servers, but they can boost the efficiency in how IS executives manage these new infrastructures through better budgetary and strategic planning initiatives.
NT NOS Migration and Evaluation
IS executives developing strategic plans for consolidating NT servers may also consider a NOS migration while doing the consolidation. Dell's Business Solutions Consulting and Custom Engineering groups will support IS executives who in the future want to move from Unix or NetWare to NT, or to upgrade to NT 5 when it arrives. Customers suggest that NOS migrations are never easy, but Dell's program can provide added options or investment protection for customers seeking to establish NT as the enterprise architecture as quickly as possible.
Dell's NOS-migration process starts with an audit of current environments to provide customers with a site survey of the current network topography. Dell system consultants will then hold a strategy session that provides a detailed analysis of costs, benefits and risks involved in migrating from Unix/Novell to NT. Then, Dell and a partner will set up a plan that helps to lay out the migration or upgrade through a detailed analysis of the existing and proposed target environments - for example, an analysis of the factors involved in transitioning Novell's NDS directory service to NT's directory service. Dell then may utilize the special consulting services of its partners, including Collective Technologies and KPMG, to complete the migration process by having customers work directly with these and other professional services organizations. Dell remains a single point of contact and accountability in the process.
Dell's Platform for Server Consolidations: PowerEdge Servers and
PowerVault Storage
Dell's PowerEdge servers have been developed to offer IS executives high-density rack-mounted units, and all three of Dell's models, the PowerEdge 2300, 4300 and the 6300, can be configured in rack models. Dell is launching this fall a new four-way SMP Pentium II Xeon rack-dense server that will be specially designed to reduce space - allowing 10 servers to fit in a rack (40 CPUs per rack).
Reducing the size of the footprint needed to support these servers, Dell has designed the PowerEdge servers with the following specifications: ·
PowerEdge 6350 (4U), supporting up to 10 servers in each rack;
PowerEdge 2300 (6U),supporting up to 7 servers per rack cabinet;
PowerEdge 4300 (7U), supporting up to 6 servers per rack; and,
PowerEdge 6300 (7U), supporting up to 6 servers per rack.
Dell has also partnered with Microsoft to provide Microsoft Cluster
Server (MSCS) packages for customers needing increased reliability. PowerEdge servers will also receive a boost by the first half of 1999 when Dell introduces an eight-way Pentium II Xeon server. PowerEdge servers support a number of systems management tools, including HP OpenView. CA Unicenter, and Tivoli TME-10.
Dell this year has also embarked on an alliance with Data General's CLARiiON storage division to deliver storage subsystems. This component is especially crucial to NT server consolidation, because of the need to strategically consolidate not only servers but storage infrastructure as well. Dell brands the result of its collaboration with CLARiiON as the "PowerVault family." The first products are the Dell PowerVault 650F and 630. Each PowerVault 650F system can house over two terabytes of data configured across up to 120 Fibre Channel RAID-managed drives.
Virtual Integration: Dell's Unique Way of Fulfilling Service and Support
Dell's NT server consolidation strategy is delivered not only by Dell but also by its service partners - an approach unlike that of a number of Dell's main competitors in the computer-hardware business. While this method of delivering service, called Virtual Integration, may not be the best choice for every IS executive, it does offer a cost-effective approach to the delivery of professional services.
Dell utilizes its partners, specifically Wang and Unisys, as well as other consulting organizations, to fulfill services it does not have internally, eliminating some of the costs associated with these services. Thus, when a Dell systems consultant working with a customer determines that the customer requires additional resources to fulfill their needs, Dell will bring in one of Dell's service partners, based on the partner's expertise. This same model is also being used to allow Dell to work jointly with Microsoft to certify engineers, as well as product and technology research to assist in servicing customers.
And Dell has already begun to offer new levels of support by using the Internet. This includes "Premier Pages" on Dell's website that are customized for individual customers with procurement and purchase order information, account team information and service and support information. These Premier Pages then become the medium through which the Dell Premier Access Program delivers information to corporate help desks and third-party service partners.
Dell's Direct Customer Experience: A New Delivery of Services and Support
Virtual Integration also means that Dell offers a single point of accountability for service and support, regardless of whether the service is fulfilled by Dell or any of its service partners. Dell states that having first-hand knowledge of the customer's purchases assists it in quickly tracing customer hardware profiles and addressing customer service needs through its own customer service organization and third parties.
Dell's professional service partner framework has three levels of service capabilities:
1. Relationships with consulting firms that have enterprise expertise (KPMG, AC, PWC, etc.) to deliver total service solutions;
2. Break-fix maintenance services with consulting partners (Wang and Unisys) to deliver commodity services; and
3. Agreements with smaller regional consulting partners for custom and commodity services for small- and medium-sized businesses.
In addition, Dell has put in place a number of programs as part of its enterprise strategy. For example, the Dell Certified Systems Engineer (DCSE) program helps ensure that Dell Service Partner technicians supporting Dell customers have the skills to effectively support complex networks.
Market Positioning
Dell joins a large crowd of suppliers already offering server consolidation and NOS migration services, including Sun, IBM and HP. Several clear differentiators for Dell are its Direct Model approach of doing business, as well as Dell's strategic concentration on consolidating NT server environments. It is important to note that Dell's model of using partners to provide professional services is unlike those offered by other suppliers. Sun, IBM and HP have focused more on high-end systems (Unix and mainframe) consolidations, especially targeting datacenters. IBM, for example, has unveiled a suite of services that include extensive consulting with customers wishing to make consolidations. IBM has also tailored a few services towards the Unix and NT server consolidation market. Furthermore, Sun and HP have established a services program to assist customers with Unix server consolidations, especially at the datacenter level. In each case, all three suppliers are utilizing their own professional services organizations to fulfill services.
For NOS migrations to NT, Compaq/Digital offers a comprehensive migration service for Unix/NT and Novell/NT. Compaq is also Dell's strongest overall competitor because of its close relationship with Microsoft, as well as its work with Unix and NT interoperability. Dell, however, is positioned to provide an efficient plan to tackle both NT server consolidation and NOS migrations.
Conclusions
For IS executives, Dell's clear value is its ability to offer simple, cost-effective solutions in the NT server market. Dell's new strategy to assist IS with server consolidation is proof positive of this: while it may have less of the frills of other suppliers' NT-consolidation strategies, it can simplify the IS executive's strategic planning, evaluation and deployment of NT servers and help reduce the costs of administration by replacing disparate, single-function NT servers. And, if customers wish, Dell can also assist with what can be a very difficult process: NOS migration to the Windows NT environment from Novell NetWare or Unix. Dell also takes a unique route to fulfilling customers' need for professional services by working with service partners.
Dell's main challenge moving forward with its server consolidation strategy will be to convince customers that it can provide the NT service and support that more traditional hardware suppliers offer through in-house service divisions. A second challenge is to rapidly gain experience with key NT-enterprise issues that customers are facing today. In this regard, Aberdeen notes that Dell is learning fast to listen to its customers.
Although Dell's drive into the enterprise is still relatively recent, it is likely that Dell will influence the way NT-server service and support are delivered in the next few years by its new NT server-consolidation strategy. Dell has put a stake in the ground, becoming one of the first suppliers to focus on helping IS executives better control the proliferation of NT servers using low-priced solutions. For this, Dell should be applauded, for it clearly recognizes a customer need and has sought to solve it.
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