Dell in Edinburgh: My Notes from Edinburgh Chamber Event 5th May 2010
Here are my notes from this mornings excellent (powerpoint free) talk from Steve Felice, President Consumer & SME Business Dell, organised by the Edinburgh Chamber.
- Dell manage 55 million customer interactions a day!
- 99% of all private sector employment in globe is SME and over 50% of all employment
- Dell – a small business that got big. Ability to adapt talked of in terms of months not years.
- Example of great company making good use of technology: Suits that fit – custom suits that pays more than double usual wage in Nepal – “Dell model applied to tailoring” – a very customer focused
Trends – the technologies that will drive the economic recovery
- Virtualisation – save on servers required. Can typically reduce 4 servers into one. Allows businesses to scale at much lower cost. SMEs don’t understand it.
- (3/4 of audience heard of cloud computing) – eliminates need to pay licensing fee, no need to maintain – allows you to just use the application. Adoption rate of SMEs is low. 70% of businesses that have a major data loss go out of business within a year. Fear of outsourcing data. Appliances – Servers with single purpose e.g. does virus potection e.g. sonicwall or barricudu – saves you having to worry about norton etc. Another one that replaces system administrator. USP is that they just work – don’t need tech person to install it. All adds up to dramatic reduction in requirment for IT capital investment. Useful when credit is short!
- Social Media – cost effective customer acquisition and customer service – essentially free marketing if done properly. Also good for damage control. Can’t think of a better form of marketing. In the past this all had to be done by paid media so substantial reduction in cost. Social Media is “extremely productive”. Cuts costs and allows you to stay better connected with your customers.
How Dell Survived the Recession
Steve has a guarded but very upbeat view of recovery – especially in the East, even seeing signs in the UK, not as big as France and Germany but it is coming back. North and South America also growing. Sees technology investment as a leading indicator.
Dells’ approach to the recession (talked of as being in the past):
- Preserve cash – did that so that they could spend when they saw things getting better (e.g. bought Perot systems for $4billion but still have $11bn kicking around
- Preserved the margin – led to loss in market share to those operating on smaller margins. Focused instead on product development now back in growth.
Answers to questions
- Focusing on very targeted e-mail and customer interactions – very complicated but core to what they are doing.
- Dell uses open standards technology (something that goes back 20 years) – Don’t use Unix or IBM mainframes. Use Linux, use Microsoft (?!)
- Doesn’t see Tablets as a passing phase. The debate though is are they replacement or complimentary. Sees iPad as specialised – too big to carry when you still have to carry your notebook? Sees closed nature of Apple as potentially problematic.
- Public stance on Apple is locked down technology is bad for customers
- Believes that most of the best ideas occur in garages so still wants to see governments and banks make it easier to get finance for these ideas
- Interesting question about problems of having channel partners as well as selling direct to customer – a bit of a conflict but one that can be worked through.
(Sat next to @colingilchrist – he was using paper! Perhaps his netbook got blown up in his microwave fire last night)