Dell, Microsoft Windows Server Highlights
- Readies its PartnerDirect channel for Microsoft’s new operating system
- The ending of support for Windows 2003 in July 2015 creates a call to action for customers
- Links its training and collateral to sales cycle phases
- Aims to help its channel move to higher-margin services
- Will include other software and hardware with the upgrade business
- Microsoft estimates that 80% of its servers run Windows 2003 today – 30 million by our estimates
Dell is particularly strong in the Windows server market – its $6.8 billion revenues put it in second position behind HP and it had an installed base of 8.4 million – a 22% share – at the end of June 2012. Its position through channels is less strong, although it has been building out its PartnerDirect business significantly in recent years. You’ll be interested in how it is gearing up to help its channel incorporate Microsoft’s new Windows 2012 operating system.
12th Generation PowerEdge Servers And Windows 2012 Combinations
Dell is readying its PartnerDirect channel for the introduction of Microsoft’s Windows Server 2012 operating system. It argues that Microsoft’s withdrawal of support for the 2003 version in July 2015 will create momentum – especially as by Microsoft’s own estimates 80% its servers currently run the 2003 version. Dell believes that the (almost) 3-year gap is short and that users need to think about upgrading soon. Microsoft’s new operating system includes many new features, including those supporting Cloud environments. Dell’s 12th generation servers also complement the new operating system: their higher memory scalability for instance will allow maximum use of the operating system’s new features.
Changes For PartnerDirect
Dell is also making new training and collateral for its partners – with the latter tuned to the ‘identify, qualify, propose and close’ phases of the sales cycle. It believes it offers a unique revenue opportunity for its channel to move away from low-margin software installation and services businesses to higher-margin consulting and design services. In particular it encourages a workload and end-to-end solutions view of systems, rather than a simple hardware and software one. It also positions many other offerings (such as its EqualLogic storage and services) its partners can link to this operating system upgrade business. In the case of Quest however, it thinks it is too soon, as full integration has yet to be achieved. It notes that there is a strong overlap between existing Quest and Dell partners at the moment and is following a ‘do no harm’ strategy as Quest is integrated into its new software group.
Some Conclusions – Upgrades May Prove Slower
We’re not as bullish as Dell on the opportunities, as many corporate server users will wait at least for the first service pack before upgrading: they need to make plans to move, but don’t need to jump straight away. Dell will also need to focus more on the advantages of the new operating system, although it is correct to draw attention to the implications of the old product’s withdrawal.
Dell is more reliant on Microsoft than IBM, Oracle or HP, as it has never had its own Unix or mainframe machines – that reliance will certainly decline as its software group begins to compete against Microsoft in a number of areas. For now we should expect the strong partnership between the 2 suppliers to help it drive strong growth, especially through its channel.
This is all rather amazing to me, as two of Microsofts most successful products, Windows XP and Windows Server 2003 are being killed off.
Forgive me if I am hurt!
Up until July 2012 when updates were terminated, XP was the most popular MS product.
As a software person, it is apparent to me that a well-designed O/S can go on with reasonable functionality for an indeterminate period-with updates.
Also, for servers the first principle of administration is don’t fiddle with what is working perfectly over time-certainly un-tried and tested O/Ss are a nightmare.
So MS is killing its market leaders in order to get cash from the people who have been loyally using MS products. MS want money for nothing!
MS and its business partners like Dell have to treat customers with respect or they will loose shareholder value.
If you are locked-in by skills to MS products, you really have no choice but to pay up. This situation is unlikely to change in the forseeable future.
Windows 9 could be just as unnecessary.
The fact is Server Operating Systems are nearly perfected. You can enhance them on a modular basis, whatever the future requires. There will never be another Windows 95. MS should wake up and smell the coffee.
Moving to Cloud with MS O/Ss is going to be much more expensive, but is do-able. You will need bare metal servers with the Virtualisation built in. A nice little earner for Intel and AMD and another expense for the poor customer (other brands can run well a little slower on most hardware).
Windows 8 runs on Smart devices too but MS are taking the approach that RIM and Apple are of surcharging products on Smart devices. A mistake in my view. It simply undermines the whole launch of Windows 8.
I have a lot of respect for Dell but that respect is waning as they lumber on after MS, the blind leading the blind!
Rich
Thanks for your comment.
Software and hardware going off support at end of life is a feature of our market. I’ve argued that the OS should be something small with tools added around it ever since having a ROM based on on my BBC micro in the 1980s. There’s also a long running debate about whether the OS should be a separately charged-for item and, if so, how much it shouuld cost. However 2003 to 2015 is a long enough cycle. 30 million servers need upgrading and of course it’s up to Microsoft to prove that the new version has relevance, especially for Cloud use. I don;t think we can blame the hardware suppliers for seeking to take advantage of this very practical situation. It will be up to Red Hat and other Linux distributions to demonstrate a viable alternative.
Best
Martin