Network Computing is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Dell Not Ready To Mount Small-Biz Services Offensive

Dell is holding off on mounting a services offensive in the small-business market until the company can deepen its services penetration in the enterprise and midmarket segments, a Dell executive said Monday.

"We figure the opportunity for us is to move into the higher end of the medium-[size] business [space] and then drive it down over time, as opposed to go and compete with a pretty well-entrenched VAR channel at this point in time," said Dell Senior Vice President of Americas Joe Marengi in a conference call with analysts. "It doesn’t make any sense to us. Even though there are revenue opportunities there, we are going to wait in our life cycle as a company to really try to penetrate that."

Dell's enterprise and midmarket services offensive is only in its infancy, Marengi said. His comments come as Dell has boasted that services now represent its fastest-growing business, amounting to a $5 billion annual run rate or 9 percent of total sales. Dell said its services business is up 36 percent this year and has grown more than 30 percent for the last six quarters.

The Round Rock, Texas-based hardware giant also reiterated its plans to build a strong partner network to deliver its services and to expand its Dell-badged services employee base. The company, however, refused to specify how many of its 52,000 services professionals are Dell-badged employees vs. Dell services partners.

"We have and will continue to have very strong partner elements of our service delivery capability," said Dell Vice President Gary Cotshott. "We have a very strong ecosystem of partners whom, in many cases, we would be their largest customer in the world. It is more than just a partnership with them. In addition to that, we always have sufficient Dell-badged capacity and are growing that capacity very aggressively in all areas to be able to effectively manage the execution on an end-to-end basis for all our contracts, regardless of whether it is a support contract, managed services contract or special services contract."

  • 1