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Dell software chief: why hardware is no longer enough

Hardware giant sets its sights on systems management, security software and business intelligence

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Dell launched its software group at the beginning of 2012, and since then the company has been defining a strategy for the group and populating it through acquisitions – the biggest and most recent of which was Quest Software.

Techworld caught up with John Swainson head of the new software group when he was on a recent visit to London, to find about how the strategy is going, how it compares with HP, and what customers can expect from Dell on the software front in the coming months.

Historically, Dell has brought software into its solutions by working with partners. Swainson said that this would continue to be part of the equation, because Dell is not going to try and recreate what companies like Microsoft have done. 

“On the other hand, you can never achieve the same level of integration working with a partner that you can achieve in your own development lab, so that was starting to necessitate some level of Dell owning its own IP.”

Over the past 2 years, Dell has bought six software companies, including Quest, SonicWall, AppAssure, Kace, Make Technologies and Boomi. The software group's strategy hinges on three core areas: systems management, security and business intelligence (BI).

Swainson said that systems management is the area where Dell has the most assets and most revenue today. Although security and BI are growing more quickly, systems management is critical for Dell, because the company is already in the systems business on the hardware side.

“We see the same trends in the market that everyone else sees. We see the move from physical to virtual, virtual to private cloud, private cloud to public cloud – that move is facilitated by software and, if for no other reason, we would need to have a software play,” said Swainson.

“Systems management was where Quest was primarily focused. It was where Quest had the most assets, and we've made some other acquisitions in that space. It was a pretty big business for us already, and it's a bigger business with the acquisition of Quest. 

Another trend that Dell sees is the proliferation of mobile devices and the impact that it is having upon the enterprise, as employees want to bring their own devices to work. Swainson said it is important for Dell to ensure the security of corporate data when people are using it on their personal devices.

Dell already has a $100m-a-year business around end point management, managing PCs and laptops with its Kace family of appliances. At the beginning of 2013, the company will build that out to include mobile device management, and ultimately BYOD (bring your own device) management.

“Security is probably the fastest growing area, and it's the area we've got the second largest number of assets today,” said Swainson. “It's probably an area we'll continue to invest in pretty heavily.”

The third thing that Dell is hearing from its customers is that they want to make use of the vast quantities of data generated by mobile devices and social media, but many of them don't employ data scientists and can't necessarily afford to spend millions of dollars on unique big data appliances. 

Swainson said that business intelligence is a natural play for Dell, because big data is transforming the market in Dell's favour.

“Data-intensive applications used to be highly constrained by the amount of storage available, the amount of real memory available, the amount of cached memory available, the number of paths to the data. In the last few years, with the advent of the current generation of Intel processors and modern system design, those things have all become orders of magnitude cheaper,” he said.

“So now you can have machines with multiple terabytes of storage, and even terabytes of real memory for a few tens of thousands of dollars. It's just astonishing the level of performance that you can get out of these machines, and you can basically put a whole database into memory – the indexes and everything.”

Dell recently announced appliances for SAP HANA and Microsoft's database offerings, and is also looking at building other database-intensive appliances that have Dell's software as well its partners' software on them.

“We have a very strong database tools business today, part of which came from Quest and part of which came from Boomi, that we are using in conjunction with these data appliances to create a richer data environment,” said Swainson.

“So when we ship our Dell Data Appliance, it's got our software on it, and Microsoft's software, running on our hardware.”

Swainson said that, in comparison with HP's acquisition of British software firm Autonomy, Dell paid quarter of the price for Quest for about the same revenue, and Quest is a much better fit. 

“We're moving very aggressively to bring together 6 companies – not into a business that existed before but to create a new business within Dell which is really the best parts of those six companies,” said Swainson.

“So it's a very different to the model that some of our competitors have, or people who might have an established business where they're trying to merge it into something that already exists.”

He said that Dell's strategy is to “approach it through the lens of tools,” by building hardware appliances and then partnering with companies like SAP and Microsoft to deliver the database itself.

“Ultimately we want to build this into a multi-billion dollar business, and we think you can't do that in one dimension,” he said.

In some ways, however, the fact that competitors such as HP are also investing in software could help Dell to educate customers on the benefits of an integrated strategy. Swainson said that, in recent meetings, customers have been remarkably open to the idea of Dell software.

“It's not exactly a new idea, competitors of ours have already done this, so it's not like we're the very first company that started as a hardware business to get into the software business,” he said.

“They're the ones who told us that they really wanted Dell to bring a more complete offering to the table, and that simply reselling other people's technology wasn't giving them the level of integration and ease of use that they felt they needed. We're responding to their request and I think they appreciate and acknowledge that.”


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