Dell makes major organizational changes to commercial business
5 January, 2009
By Paul Weinberg |
It is apparently business as usual for the channel and business customers of all sizes in the wake of Dell's commercial reorganization and the replacement of two top executives.
"Customers will be able to expect from us a more consistent account management, deeper solutions for specific industries and more tailored products, services and solutions that best address their specific needs," David Frank, a Dell spokesperson, told eChannelLine.
He said the announcements were unrelated to current global financial difficulties.
"We'd begun streamlining and creating more efficiencies across our company over the past year and a half or so," explained Frank.
Dell had previously announced the establishment of a separate global business unit for consumer products. Lately, it has extended that approach with similar units for large enterprises, small and medium sized organizations and public (i.e. government, health care, education and environment) bodies.
"We want to have global standardized products and services, and so the changes will enable us to move with greater agility on a worldwide basis to respond to customers' needs."
Frank emphasized that despite greater centralization, Dell is maintaining its regional sales teams and channel representatives in order to respond to local requirements.
But the Dell spokesperson would give no details involving the simultaneous departure of two senior executives, president of global operations Mike Cannon, a former CEO of Solectron Inc. and chief marketing officer Mark Jarvis, previously with Oracle. While Cannon and Jarvis separately joined Dell in the first half of 2007, both have been replaced by longer-term Dell execs -- Jeff Clarke and Erin Nelson, the latter being Dell's former vice president of marketing for Europe, Middle East and Africa. .
"I am not going to comment on industry speculation; there is nothing to say there," stated Frank.
"The departure of Mike Cannon and Mark Jarvis signals that two of the largest internal efforts instituted after founder Michael Dell returned [to the CEO job ] the reorganization of Dell's supply chain and the company's marketing group are essentially complete," said Charles King, principal analyst at PundIT.
"It is not at all unusual for company's to replace executives who specialize in or are brought aboard for specific reorganizations after those jobs are done," he continued.
King noted that Cannon's replacement, Jeff Clarke, is "intimately acquainted with supply chain issues" given the man's experience in managing Dell's business desktop PCs and notebooks as head of its Business Client Product Group
Meanwhile, Michelle Warren, principal at MW Research & Consulting, is keenly waiting to see how the internal restructuring at the top at Dell will materialize over the next few months.
"I am a little concerned about how it will affect the day to day operations, if you take Canada specifically," she reported.
"Instead of somebody [at Dell] overseeing Canada, they would be overseeing that division on a global level. It could have an impact on a go-to- market strategy per region. It is the only negative that I can see."
Rob Enderle, principal analyst at the Enderle Group, thought that Dell's reorganization around customer groups rather than by regions should simplify product lines, reduce costs, and allow the company to better target specific groups of customers that are similar globally.
"The change has flavors of Apple (simplification) and IBM (global market approach) to it and, if executed well, should make Dell more nimble, and more cost effective in what will be a difficult first half for the segment."
Enderle predicted that the onset of more products and marketing programs from Dell should "speak to what Dell's customers do more than where they live."
Similarly, Charles King suggested that Dell's strategy reflects an ever-increasing "flattening" of the global market for IT.
"In many global industries, products are typically marketed and often designed to appeal to regional and national tastes this can be as simple as labeling containers in a local language or as complex as formulating unique products for specific markets. Dell's global re-org reflects a belief that integrating efforts around specific product classes -- consumer, enterprise, public sector and SMBs -- will deliver greater benefits than a fragmented, regional market-focused approach."
Another industry analyst stated viewed Dell's reorganization as definitely related to the current global economic situation.
"During bad times, vendors are more likely to move to larger regional or global organizations than they are to country-level because of the economies of scale/cost-savings. That doesn't mean it's the best way to organize, and it doesn't mean that's what they would do when sales levels pick-up, but it's what they've figured works for them under the circumstances," stated Warren Shiau, lead analyst, IT research at the Strategic Counsel
Rob Enderle also traced a direct connection between Dell's recent announcements and Hewlett Packard's ability to stake out a market leadership position in computer hardware.
"This isn't a fight for survival. It is a fight for the number one slot and Dell should be more agile than HP is, but hasn't been."
Dell is trying to figure out how to return to the old days of big profits and market leadership, commented Amy Wohl, president of Wohl Associates.
"That means trying to figure out how to do better in the consumer market -- which HP is just having a fun fest in -- while trying to expand both their market share and their product offerings in the business market. It isn't easy. You can see that some of [Dell's] ideas of "fixes" -- (outside hire -- didn't work. Now they are going to try something else."
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