OEMs (Original Equipment Manufacturers) occupy such central roles in the tech industry that’s it’s easy to think you understand all there is to know about them. People mostly associate IT OEM functions and processes with the vendors that make hardware products running popular commercial operating systems, like Microsoft Windows and Windows Server, as well as thousands of business and consumer applications, toolsets, apps and utilities.
That’s a reasonable view but one that ignores the OEM services that many hardware vendors offer customers, from tiny start-ups to multi-national enterprises. In essence, those vendors provide the computing “brains” that power everything from set-top cable boxes to bank ATMs to smart TVs and other home appliances to manufacturing and automation solutions to medical testing and imaging equipment to telco switching systems.
How IT vendor’s OEM efforts contribute to the development, design and manufacturing of these products varies widely. However, the notable success and continuing growth of Dell Technologies’ OEM organization over the past decade makes it a subject worth examining.
Dell Technologies OEM and IoT in the beginning
Shortly after returning to the company’s CEO position in 2007, Michael Dell prioritized growing the company’s OEM business. Why so? In large part, to leverage and extend Dell’s considerable supply chain capabilities and assets. In addition, as the company invested further in research and development (R&D), Dell recognized that the same new technologies that improved and differentiated his own company’s commercial products could offer similar benefits to OEM customers.
The OEM business grew steadily over the next five years but stepped-up significantly beginning in 2012, the year Dell appointed Joyce Mullen to take over managing the group. Mullen, previously Dell’s VP and GM of Global Alliances and Software, brought deep experience in global planning, operations, strategy and partner relationships to the table, all factors that helped substantially accelerate the OEM business’s growth.
Two years later, Mullen opened the first of what would eventually become three Dell Internet of Things (IoT) labs in Santa Clara, California. What does IoT have to do with OEM? During the course of growing its OEM engagements, the company discovered that many of its customers were well-positioned to leverage Dell’s edge-of-network solutions, such as the Edge Gateway 5000 Series.
In some cases, such as factory automation offerings and video security systems, customers were already collecting data that could be further analyzed with IoT solutions to enhance performance and service offerings. In addition, Dell recognized that supporting OEM customers’ unique intellectual property (IP) and vertical industry expertise for IoT use cases would open commercial opportunities that were too specialized for Tier-1 vendors to consider exploring.
That strategy further expanded the OEM and IoT organization’s engagements, and in November 2017, Mullen was named president of Dell’s Global Channel, OEM and IoT. The following March, the company named Bryan E. Jones, a longtime Dell and EMC marketing and sales executive, to become SVP and GM of the OEM and IoT Solutions division.
Dell Technologies OEM and IoT today
Recently, Jones hosted an industry analyst briefing to discuss the state of his organization. So how is Dell Technologies OEM and IoT business doing? Overall, darned good. Since 1998, the division has completed over 8,000 product designs that resulted in products available in more than 70 countries. Jones also discussed how the OEM and IoT group is contributing to Dell’s overall business, noting that in FY 2019, the division delivered $5B in orders, or roughly 5 percent of Dell Technologies’ overall revenues.
That’s a substantial piece of business by any measure. Jones also discussed the group’s robust 36 percent YoY growth rate which is running at a 23 percent premium to the industry average for OEM vendors. Given those points, it’s hardly a wonder that IDC and other research companies have noted Dell’s leadership in global OEM engagements. If the annual market for OEM/IoT grows to the $40B-$50B that the company’s internal research estimates, Dell is well positioned to continue prospering.
That’s especially true given how Dell Technologies OEM and IoT is transforming itself and its portfolio in order to better serve existing and prospective customers. For example, by leveraging Dell’s portfolio of Tier-1 solutions and its global manufacturing facilities, OEM customers can move quickly, embrace bold designs and scale production to meet growing demand and sales.
Jones also detailed how the company is helping customers adopt new technologies to improve their own products and services, including Dell hyperconverged platforms and software-defined solutions, VMware virtualization and hybrid cloud offerings, RSA security and Pivotal cloud-native development tools and applications. Working closely with Dell’s dedicated OEM engineering team enables customers to quickly overcome complexity problems and other impediments.
Those same team members can also customize underlying platforms as necessary and help accelerate product delivery. In addition, Dell’s supply chain and production capabilities enable customers to effectively reach new audiences that they may never have considered. At one level, that includes replicating and delivering solutions in global markets. But Dell also has the means to build pre-certified, trusted solutions in markets where local manufacturing is required or offers a competitive advantage.
Finally, the company’s OEM and IoT organization can provide a conduit that enables customers to leverage Dell to support and maintain their solutions in the field. That’s obviously invaluable for smaller companies without the wherewithal to offer such services, but it can vastly simplify life and business for larger companies, too.
In a separate discussion I had with Bryan Jones at Dell Technologies World 2019, he noted the larger value that his organization offers to customers. It isn’t simply a matter of executing successful manufacturing engagements. Instead, Dell Technologies OEM and IoT can help customers make the right decisions about the solutions they use today and open their eyes to the opportunities presented by next generation technologies and tools.
The key, Jones said, was to help customers understand the connections between their aspirational goals and commercial market opportunities. That may sound like feel-good hype, but consider the source: While IT vendors of every stripe love to highlight their entrepreneurial qualities, Dell Technologies has lived the dream – growing, literally, from a visionary kid building custom PCs in his dorm room to become a near-$100B company with 140,000+ employees in 35 years.
Obviously, not every customer will achieve that level of success. However, Dell Technologies’ OEM and IoT division can provide the solutions, assets, services and advice that customers need to achieve their aspirational goals and successfully bring their products to global markets.