Sramana Mitra: I think of a well-articulated framework in the picture. Let’s go into more detail on it. Where are you as Dell, as an organization, along that continuum? How much of that very specialized SARS application, procurement, or positioning is happening in different parts of your organization, and how is it managing that inflow of diverse application, integrating them, and keeping all that intrusion of new functionality from different parts of the organization into IT?
Jim Stikeleather: Well, within Dell you’ve got a couple of things going on. In particular, the strategy at Dell is that we use the products and services that we sell. As I indicated, we have cloud services of our own. You may be aware that in 2009 Dell acquired Perot Systems, the big outsourcing company. Perot Systems is now Dell Services, and Dell Services is the services vendor to Dell Corporate. With Dell Services, in some way you can say Dell has already gone and outsourced even though it is outsourced to another part of the company.
What we have been doing is acquiring many cloud capabilities. As I indicated, we have the cloud system management capabilities, Evergreen, Silverback, and Message One, and we are using those capabilities. We recently acquired medical backup and store cloud-based medical backup and storage, capabilities that we will begin moving in to something that we can use ourselves. We recently acquired Boomi, which is software as a service integration, if you will, for integrating multiple SaaS applications. We’ll begin incorporating that internally.
We’re one of the largest consumers of Salesforce.com.In fact, our entire sales channel is on it and we are beginning to use it for other things as well. It’s more of a directed evolution in that we know where we are going to end up but we’re not exactly planning it step by step. We are trying to increasingly orient ourselves toward what is happening then observe what’s happening. You orient yourself to that, decide what you want to do next, and then act on it.
So, it’s a continuous loop as we look at what are the needs of the business, what’s happening with the technology, what are the needs of our customers. We want to use what we are selling to our customers, so it’s more of an evolutionary process rather than a specific, planned one. Other than that, we do have specific goals and targets for cost reductions because at the end of the day and indeed right this minute from a tactical perspective, the real value of the cloud is the compelling economics that are associated with it. Later on there are other values: agility, flexibility, adoptability, and the ability to tie costs more directly to your revenue streams because you basically shift IT from a capex to an opex model. But right now the focus is on getting the cost reductions benefits that are associated with the cloud and then doing it in this evolutionary fashion.
SM: Given that is the state of things right now inside the Dell, you’ve shared several different pieces of what your strategy and execution are. Moving to a slightly different topic, where are the opportunities for innovation? That’s your primary charter, so let’s talk about innovation. Where are the innovation opportunities? As in, what open problems do you face? Where you would like a solution but you are not finding one in the current vendor world or ecosystem? What would you point entrepreneurs to?
JS: Well, there are couple of areas. If we are moving to the [Wired editor Chris] Anderson long tail, an almost economically perfect marketplace, clearly integration of information is going to be key component of that. We acquired Boomi, and that’s our first step in the direction of being able to have . . . in the same way you want the cloud to be dynamic in the same way that on an electricity main meter you pay for what you use when you use it and so on. You want your integration process to be the same way, and that when you come up with a new package wherein you can make couple of clicks or a configuration and that system is then integrated with the rest of what you are doing. That is one piece where there is tremendous opportunity for entrepreneurs It’s coming up with integration software products as much as it’s going to be an integration service. The reason that I say that is that there is a great report from the corporate executive board called The Future of IT, and this report projects through 2020 the evolution of the IP organization. But the report is based not on technology changes but rather on the changing nature of business and the organizational structures inside a business.