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Business Management

Michael Dell: My smartest decision

Talking about the Internet of Things (IoT) at a technology conference these days is de rigeur. Tech firms saying they have an IoT solution is a bit like saying your home town has an Irish bar. As it happens, Austin in Texas has a very good one, BD Rileys on Sixth Street, where this week delegates to Dell World 15, could be found sampling the Guinness and talking shop.

Naturally a lot of the talk was about the deal with EMC and what it means to the business in the short and long term. Founder and CEO Michael Dell, a clearly revitalised man since taking the business private again, wanted to speak about the long term plan, dismissing “too much short-termism” as a common ill and questioning whether his rivals are thinking of the shareholders first and customers second. He can say this sort of thing now he’s private.

I asked Michael Dell what was his best ever decision?

“Leaving university to start the business would be up there,” he replied. “Asking my girlfriend to marry me. That was a massive one and going private of course.”

That last one is clearly evident. Dell said dealing with a public company was a little bit like the way MPs argue in the House of Commons.

“It’s tough to get anyone to agree right?” he said. “They are always arguing and it’s difficult to make any decisions.”

So the conference was an opportunity for Dell to reveal his hand without looking over his shoulder. It’s no secret the company has designs on being this super, end-to-end systems business, the complete package, but what does this mean in terms of the long term and can it actually be achieved?

If anything Dell has been plugging the holes in its offering, driven to a large extent by the demands of its customers and the increasing pressure on its storage business. Nowhere is this more evident than in its move into the IoT space with a low cost, commoditised IoT gateway aimed primarily at the smart building, transport, energy and manufacturing sectors.

According to Andy Rhodes, Dell’s executive director of its Internet of Things Solutions, the company has 160 “proof of concept” projects on the go at the moment, using its new gateway hardware. Conceived in a Limerick IoT lab in Ireland, the Edge Gateway is a rugged bit of kit but Rhodes admits, “Gateways are horses for courses now.”

So what’s different about this one? Is Dell doing a Dell on the fledgling IoT hardware market?

To a certain extent it is. It’s a bit of history revisited. Rhodes says that a lot of gateways are not doing the intelligent data work at the edge of the network, pushing everything to the cloud and using up valuable bandwidth in the process.

“There are some gateways out there from the operational tech world but they are hugely expensive and already proprietary running one or two things from that manufacturer,” adds Rhodes. “Cost tends to be in the thousands. It’s akin to the mainframe market 30 years ago.”

So the market was ripe for, dare I say it, a bit of disruption. Intel and Cisco among others are already playing in the space but Dell’s move is more than just a hardware one. Dell has taken the traditional gateway architecture and added additional storage, computation, and analytics capabilities. The aim is to make the gateway an edge analytics machine in combination with its middleware analytics software Dell Statistica.

Rhodes says that the data from operational devices, “things in factories, things in buildings like air conditioning and elevators,” needs to be “scrubbed”. The meaningful data can then be sent on its way to the next level of the architecture otherwise exabytes of meaningless data will be sent to the cloud using up storage space and over complicating the analytics process with potential latency issues.

It makes sense. Edge analytics is critical to the future of IoT, especially in big data industrial environments.

In his keynote Michael Dell talked about the company’s icebreaker strategy, having products and services that open the door and lead to sales opportunities for the end-to-end sales and marketing patter. So is IoT now a door opener for Dell?

“We didn’t design the gateway to lock in customers, with Dell’s back end in mind but we do provide better, together elements,” said Rhodes. “It works better if you attach it to other Dell stuff, for example in analytics, through Statistica.”

Rhodes admits this is not unusual but it fits with Dell’s conference marketing mantra about future technology. It certainly gives Dell a potential foothold as businesses increasingly investigate the potential of sensor-based products and the efficiencies that can be gained in understanding the data.

Stowe Boyd, managing director at Gigaom Research believes that Dell could see this as an opportunity for opening doors but says that it is much more about speed to market, grabbing share and establishing credential in an area which is still in its infancy.

“Dell’s actions definitely seem to be based on the premise of a rapid adoption of technologies like their IoT Gateway beyond the more traditional manufacturing sector,” he says, “and a world where companies will have a need for monitoring several orders of magnitude more sensors and communicating devices.”

Dell couldn’t of course do this alone. Rhodes says partnerships are more important than ever here and the company is actively looking for partners to create market relevance for its gateway products, many more of which are due out over the next 12 to 18 months.

“We are building a partner network programme, people like OSIsoft, SAP, it’s about integrating that data back into the existing enterprise. So it’s always a challenge bringing companies together but we know how to do this. We’ve been an open standards, partner-lead company for many years. As we go through the year we are looking to build better blueprints in IoT so customers don’t have to spend so much time on their proof of concepts.”

Certainly Dell has an opportunity here, at least to use its vast experience in building hardware and routes to market, to open new doors to verticals where it is not particularly strong. It’s a reactive decision but a bold one too, something which would probably have taken much longer to put together if it was still in public ownership.

By his own admission Michael Dell says he is not particularly well known for making safe decisions based on profit margin projections. He is a technology-led CEO. IoT and the associated data analytics business in his mind, is a must-have for the Dell arsenal and one that will potentially drive its business for years to come.

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Marc Ambasna-Jones

Marc Ambasna-Jones is a UK-based freelance writer and media consultant and has been writing about business and technology since 1989.

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