November 21st, 2008

Source: Computer Dealer News

Dell’s third quarter revenue and profit drop maybe be a sign of the poor economy and the uncertainty it brings, but it could also be a signal that customers want technology in new ways.

Those new ways are cloud computing and managed services or technology-as-a-service. One of the big stories this year came from Larry Keating’s Notebook-as-a-service offering. This offering maybe slow to start but it makes a lot of sense now more than ever with IT budgets tightening.

Also Dell’s channel program and commitment to the channel is taking some time and the company knows that. They have 700 or so channel partners signed up in Canada. In the U.S. they have many thousands signed up to its PartnerDirect program.

If they had the channel program in place say two years ago they might not have suffered this recent five per cent drop in profits.

Facts are facts and there is an IT spending slowdown. Analysts have repositioned their forecasts for 2009. So this recession is happening even if it has not hit the channel that hard in Canada.

But now is not the time to push the panic button for Dell or any of its newly signed channel partners. This is the time to act smart and look at managed services or notebook-as-a-service offerings. These make more sense to customers now that they are closing their wallets to IT.

One quick hit before I go.  Nand Mulchandani, VMware’s top security executive, has left the company to be CEO of OpenDNS of San Francisco.

This is just another high profile departure from VMware after founder Diane Greene was forced out a few months ago. However, Mulchandani said that his departure has nothing to do with Greene. He added that an incredible opportunity to become a CEO at OpenDNS was just too good to pass up.