How Dell Has Reinvented Itself in the Last Five Years

By Chris Preimesberger  |  Posted 2011-04-15

How Dell Has Reinvented Itself in the Last Five Years

It's pretty well-known by now that Dell is determined to change its whole approach to providing IT products and services. But its evolution in the last five years-and especially in the last 18 to 24 months-has been nothing short of stunning. 

The company that originally was called PC's Unlimited (pictured) and that made its mark by selling personal desktop computers over the phone has come a long way from Michael Dell's dorm room at the University of Texas in 1984 to one of the world's largest suppliers of computers of all types. But it is hardly satisfied with that distinction.

The Round Rock, Texas-based computer hardware maker is fast becoming a full-service IT systems maker, with all the software and services that must go with that identity. And it's making the data center-along with private cloud systems-its No. 1 priority.

To morph into the all-everything IT one-stop-shop that it wants to become, Dell has had to dig deep, gather investment capital and go out and find the right pieces of the puzzle to reshape the company for its next  25 years.

Dell has made no secret of the fact that its strategy for the next few years is to invest in hardware, software and services for new-generation data centers that will contain private cloud computing systems. The company is doing this through a combination of acquisitions and partnerships.

Because it has been the world's largest seller of personal computers and among the market leaders in servers and storage arrays, Dell hasn't had to add much on the hardware front. Its largest acquisition thus far in this area has been iSCSI storage appliance maker EqualLogic in 2007 for $1.4 billion, an amount that many analysts thought staggering at the time.

EqualLogic, however, has justified Dell's investment. Its secret sauce in storage networking and virtualization has brought in satisfactory profit margins in the midrange storage market.

The December 2010 buy of another key storage independent, Compellent, for $960 million, bought the company another progressive-thinking young storage company with a huge upside. Compellent specializes in virtualized storage arrays with automated data-management features, including tiering and thin provisioning.

Improvements Mostly in Services, Software

On the services side-an area that the company is also making a large investment-Dell in September 2009 bought Perot Systems, a provider of information technology services and business solutions for its largest-ever acquisition at $3.9 billion. However, it, too, is paying off big time; Perot Systems is bringing Dell an additional $8 billion per year.

Using some of its newfound profits, Dell recently announced plans to spend $1 billion to build 10 new data centers, in an effort to build its own cloud-services backbone.

In software, Dell has been busy filling in its data center needs. Smaller acquisitions of Scalent (data center automation), KACE (application virtualization), Boomi (SAAS integration) and SecureWorks (cloud security) all have taken place within the last 14 months.

New Approach Built Around Private Clouds}

Praveen Asthana, Dells vice president of computer hardware and the companys former director of enterprise storage, confirmed to eWEEK that Dell is coalescing its new data center approach around the buil


Meinhardt (pictured) said Dell's corporate support and resources have been extremely beneficial for KACE since the acquisition a year ago.

"For example, as a startup with limited resources, it's tough to jump into Europe-it's expensive to get over there," Meinhardt said. "And to put the right people on the ground. Now with Dell, we've got the resources to do that. We were able to take three or four of our very best guys and put them over there (for sales purposes). 

"Once you're there, there's already an ingrained process for marketing and selling, so we have way more reach that way. In the English-speaking countries like the U.K., Australia, New Zealand, Ireland ... we had a real tough time the first two or three years doing it on our own. But now, things are starting to take off."

Boomi makes a SAAS application integration platform called AtomSphere that enables easy transfer of data between cloud-based and on-premises applications-with no appliances, no software and no coding required.

Boomi's platform is used by Salesforce CRM along with large enterprises in verticals such as marketing, financial, human resources, content management and service-desk management. Boomi manages millions of transactions a month and has completed tens of thousands of cloud integrations for hundreds of global customers.

"This was a fantastic outcome for the team, our customers and partners," Boomi President and CEO Bob Moul said at the time of the deal. "Dell gives us the global platform to continue to scale Boomi AtomSphere."

Dell has integrated Scalent's V/OE (Virtual Operating Environment) into its AIM (Advanced Infrastructure Manager) control software. V/OE allows IT administrators to manipulate all the elements in the data center from a single Web-based console, provisioning and reprovisioning them as needed.

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