Dell Makes Another MSP Move
Michael Dell must be feeling aggressive. Less than a month after acquiring Silverback Technologies — a managed service platform provider — Dell is paying $340 million to acquire a company that specializes in automated asset management.
Dell’s latest target is ASAP Software, which offers Web-based software for asset inventory, software license compliance and software usage. Hmmm. At this rate, Dell will have a full suite of hosted and managed services by the end of 2007.
During CompTIA’s Breakaway conference in Las Vegas earlier this week, several VARs predicted that Dell would fumble away key opportunities in the MSP market. The VAR Guy disagrees. The Silverback deal was a smart move. And the ASAP acquisition is intriguing.
Businesses — and their VARs — certainly want tools that can allow them to better manage and meter software licenses. Chances are, Michael isn’t done spending…
Hi VAR Guy
Thanks for the perspective on our plans to merge Dell’s software business with ASAP. We believe this will give our customers and publishers the best functionality in the industry in the areas of license and renewal management, on-line reporting and software asset management, e-commerce and electronic downloading.
We also see the acquisition of ASAP (once complete) as furthering our ability to work with partners to radically simplify IT for customers…and that is a great value proposition for all us to deliver.
I disagree.
Although there is some room for consolidation and efficiencies achieved through economy of scale, the one thing that he’ll never be able to provide is people. Dell has demonstrated that when they need bodies, they’ll outsource to India and we know how well that works. But staffing to deliver a high level of MSP service with qualified, English-speaking, well trained local people in the US will cost more – there is no way around that. Even if he’s able to accomplish most of those objectives by hiring in/around RoundRock, TX, he’ll never be able to hire LOCALLY throughout the entire US and that is the one card that local VARs still hold. So if you’re Michael Dell, you’ll try to sell this to VARs throughout the US who are foolish enough to agree to do all the “heavy lifting” for Dell.
He can try to convince short-sighted VARs, who don’t remember all the nice things that Mike Dell said about them, or how he treated the VARs who were selling millions in Dell (Google it, some were thanked with lawsuits) that they should partner with him and do all the work for only a percentage of the revenue and try to convince them of the advantage of leveraging Dell’s MSP infrastructure instead of having their own. I believe that many of the smaller, less sophisticated VARs will go for this but in the end, they’ll be selling their souls to the devil and the thanks they’ll get for their efforts is that once they’ve done all the hard work, they’ll be asked out and Mike Dell will take the lion’s share of the profits.
Dell is a force to be reckoned with and should be taken as a serious threat – but I still believe that good local VARs, who employ and train qualified and talented people and live and work in the same communities as their customers will retain the lead.
Besides, I’d guess that anyone who worked with or spoke with Silverback before the announcement knows how overpriced and arrogant they were. To me, Dell and Silverback seem well matched.
I think conceptionally it’s logical for Mike Dell to try and commoditize MSP services, like everything else because ultimately all he cares about is Mike Dell and getting the world to buy everything direct from Dell. Everyone else is collateral damage and a means to an end to get Dell there. True partnership with Dell is a myth, and I have yet to see or hear anything come from Mike Dell’s mouth to demonstrate otherwise.
What happens to the volume licensing pros at ASAP? Does that team simply get outsourced to call centers in Round Rock or Nashville or Oklahoma or worse India? There is much more to the license sale than taking the PO….and ASAP’s team brings that “more” to the table better than any other LAR. One can only hope that Dell learns vendor interaction, account management, vendor marketing, and more from the ASAP pros rather than the other way around. Tech vendors both big and small will tell you time and time again that ASAP ranks consistently amongst the top resellers to work with….and Dell, well that is a whole other story.
[…] there will be some pain involved with Dell#8217;s acquisitions of Silverback Technologies and now ASAP Software. But look at the situation: Michael Dell spent the first half of 2007 trying to restore (or […]