Dell Ties Servers and Services Even Closer

Dell today launched several enterprise products aimed at cutting back on one of the more stubborn costs in an IT department — the IT professionals. Its new lines of servers include features such as ImageDirect, which eliminates the IT professional’s role in installing an image on a server. From CNet:

It’s all part of the “new Dell,” according to Brad Anderson, Dell’s senior vice president in charge of enterprise products. Five years ago, Dell was primarily concerned with cost-efficient supply chains. Now, he says, that same company sees “cost isn’t just hardware and services, but the personnel around it.”

Dell automates and measures the heck out of things. No detail is too small if it will shave off time and money from a company’s manufacturing process. A friend of mine who works there once told me that shortly after Dell made a cost-cutting announcement, she noticed that the automatic paper towel dispenser in the bathroom had started spitting out half the length of paper towel — presumably saving some small amount of money.
That attention to detail (in combination with aggressive bill collection and payment policies) has enabled Dell to eke out growth on some razor-thin margins. It’s also changed the industry. As large data center customers begin building out private clouds, and web companies build out acres of low-cost server farms, eliminating the IT pro from having to touch each of those machines is something all the big server vendors are thinking about.
Even Cisco’s (s CSCO) push into servers will reduce the amount of equipment involved in the data center, and thus could reduce personnel. So as equipment vendors like HP (s HPQ) and IBM (s IBM) begin looking at IT services — not merely as a way to add margins back into their business but as a way to truly cut costs for a customer — Dell may find its expertise will be enough to move the needle on its lagging server market share position.