The new Dell dude - Walmart, services and a channel?

With all of the open source and and gossiping yesterday, I did not get a chance to comment on what I think was actually the big news story of the day.  Dell acquiring SilverBack Technologies is a strategic move for the Round Rock crusaders which further defines the new dude from Dell. First it was selling PC's in Walmart of all places. Now in one fell swoop they make a bold statement about services and the channel.

Dell tried to get into services once before.  Back when I was at Interliant we actually performed some services for Dell and their Dell Host brand.  Back then though, Dell looked at hosting services as a great way to sell more boxes. I think now the game has changed though. They realize that they need service revenue to compete with HP (their arch enemy) and IBM.

What is brilliant about the SilverBack buy is that it not only gets them into services, it gets them into managed services.  Not just a people /consultant play but a managed services play. This is a great play for high margin revenue.  Also it plays right into Dell's model. The managed services market has gotten big enough to move the needle on Dell's revenue.  They will come into the market and try to capture a large % of market on great pricing and then upsell additional services and products.

This opportunity in managed services is something that was a factor in our Cobia business model. We think a product like Cobia is a great solution for MSP's. They can drop a box into customers location and provide networking, security, VOIP and wireless and manage it centrally from a NOC/SOC.  Would love to talk to Dell/SilverBack about that!

One thing different about SilverBack in the MSP market is that they actually sell through the channel more than directly.  This could be good for Dell if they can hold on to the channel customers and not turn them off.  They wanted to move beyond selling directly and this is a great chance if they play their cards right.

A year from now we should see how important this actually becomes to the new Dell.  One thing for sure this ain't the dude from Dell of old.

Dell to Acquire MSP Platform Provider SilverBack