Last week at Dell Technologies World, the most significant announcement was a massive as-a-service offering called Dell Technologies Apex.
This promises to return the IT market to its long lost but fondly remembered IBM past. Back when I came out of school, IBM was the most revered and powerful technology company. This benefit was mainly due to a sales model that predated as-a-service but was surprisingly similar.
The “services first leasing model” assured IBM a steady, easy-to-manage income stream; and customers an equally manageable cost stream that assured IBM and its customers were tied together at the hip. Dell’s Apex promises even better benefits for Dell and its customers.
Given Dell’s size and status in the market, its competitors should also start driving similarly aggressive and comprehensive as-a-service moves. However, Dell’s size remains unmatched, putting this offering arguably in a sustainable lead.
Let’s talk about Apex this week. We’ll then close with my product of the week, an impressive new WiFi 6E wireless mesh solution from Linksys.
The Golden Days of Tech
IBM was in its prime during and after I left college. Years later, when I went to work for IBM, much of the damage to the company had already been done by executives who were further and further removed from the technology they sold.
Outside IBM, things couldn’t have looked better. Revenues were spiking, IBM had traditionally been immune to the U.S. and world economic problems, employment was for life, and the IBM was known as the firm no one ever got fired for choosing.
But inside IBM, there was cancer growing as executives shifted from staid, long-term policies that preserved IBM’s annuity-like income to policies that favored selling, rather than leasing, products — and away from the services-centric model that had made IBM great.
Once the market realized IBM had changed, and customers started abandoning the company, it had to terminate, for the first time, a CEO prematurely, hire a new CEO from the outside for the first time, and significantly downsize, resulting in the first massive layoffs in the company’s history.
Since IBM had been one of the last remaining employment-for-life companies, this wasn’t only traumatic for customers; it was almost a death sentence for employees and terribly painful for those employees and managers that remained.
However, since then, the market has longed for stability, vendor/customer relationship, and the relatively low risk of that old IBM model. With Dell Technologies Apex, it looks like Dell is bringing an even better model back.
Dell Technologies Apex
On paper, Apex is a brilliant Dell-wide pivot back to a services model that very closely resembles the old leasing model that IBM used wrapped in services. It has many of the same benefits. It ties Dell much more tightly to its Apex customers; it provides a much more stable revenue stream for Dell and a considerably more manageable cost stream for Dell’s Apex customers. It should significantly improve customer satisfaction and loyalty.
Unlike the earlier IBM program, this as-a-service effort can adjust to customers’ needs based on usage, and, unlike services like this from other vendors, there aren’t built-in penalties for demand spikes. You pay for what you use — but you aren’t punished if something happens to spike usage.
The program seems uniquely designed to balance Dell’s need for revenue with the customer’s need for value, with no financial or operational surprises. It should have similar benefits to the old IBM model of greater customer loyalty and retention, while also allowing support organizations to embed themselves in customer operations more deeply.
Appropriately used, it should reduce the day-to-day management load on IT while improving security and allowing IT to focus on projects less tied to assuring the digital plumbing. This change should allow IT to focus on more interesting projects that improve corporate operations and competitiveness.
Dell’s Unique Protection
In IBM’s time, customer relationships were maintained by executives who increasingly treated them like the 11th item on a 10 item list, and this lack of priority was part of the cause for the IBM fall. But one of the most potent things that Dell Technologies inherited from EMC was one of the most decisive Net Promoter Score (NPS) efforts in business.
This NPS effort was based on a cutting-edge rethinking of how to measure customer satisfaction; and deeply instrumented customers so that Dell will be aware of relationship problems long before they become catastrophic. As long as Dell continues to assure this NPS effort, it is unlikely it will experience the same long-term problems that occurred at IBM.
In addition, when Dell went private for a time, it put in place protections that should mitigate investor activists and hedge funds from forcing the company to make the same short-term catastrophic moves that almost sank IBM.
I believe that as long as Michael Dell and Jeff Clark are running the company, they will successfully resist the tactical company destroying pressure from large investors who want to spike quarterly profits at the expense of long-term survivability. This belief is well-founded given the aggressive efforts to protect against this kind of interference when Dell again went private.
Dell’s current executive team seems to understand the exposure. However, subsequent management will need to be trained to maintain the NPS effort and continue to assure that the company’s moves remain strategic rather than tactical and suicidal.
Dell Technologies Apex is a game changer, and we can say that because IBM’s very similar effort last decade was a huge success until IBM’s management destroyed it. Apex is far more advanced and flexible than IBM’s old mainframe leasing program, and the level of automation, offsetting the related complexity of Dell’s current lines, has no peer in that IBM past.
Apex puts Dell on the path to becoming more trusted, better regarded, more stable, and market dominant — if management executes this strategy much like IBM’s similar effort did a half century ago.
While Dell’s current leadership and NPS efforts should prevent the company from making similar catastrophic mistakes, the eventual executive churn will create the opportunity for new execs to favor short-term gains over strategic relationships.
Assuring future managers at Dell don’t recreate the disastrous problems we saw at IBM will be challenging, but not impossible if current management continues to take customer loyalty and satisfaction as a higher priority than quarterly revenue.
Put differently, if Michael Dell and Jeff Clark leave, how they choose and vet their successors, and how those successors vet and train their replacements, will have a lot to do with whether Dell eventually sees the downside to this services-focused new strategy.
For now, Dell Apex sets the bar for comprehensive as-a-service offerings.
Linksys Atlas Max 6E
I have two mesh networks in my home, an older Linksys Mesh WiFi 5 network which is iffy, and a newer Netgear WiFi 6 network that is much more reliable. Using Qualcomm’s most advanced WiFi technology, what the Linksys Atlas Max 6E brings to the table for mesh solutions is a dedicated backchannel that assures all of the connected devices get the total available bandwidth.
This set up should reduce the need to reset the routers regularly, which has been a problem with the similarly designed Lynksys WiFi 5 solution I’m replacing.
Now, this new offering is not a cheap date. A bundle of three of the Mesh Linksys Atlas Max 6E units cost nearly $1,200. Nonetheless, for most homes these three units should provide far-higher bandwidth than any other non-6E or non-mesh solution currently in use or in the market.
Coverage area is estimated to be up to 9000 sq. ft., so you should be good unless you have a house bigger than that. Because this is a mesh unit, you can plug devices into the satellite units to get 6E bandwidth without needed 6E support in your TV, PC, or other devices that allow for a physical connection.
This new mesh system is backward compatible for those devices connecting wirelessly, but will work best with WiFi 6 or the few WiFi 6E connected devices in the market.
If you already have the $500 Linksys Hydra Pro 6E router (which I do), you can use it as a hub for the three satellite 6E mesh units, which you can then place around your home. I have found these mesh units best for things like large 4K TVs and gaming computers that don’t have wired Ethernet connections but require very high bandwidth.
For those working from home and who have kids either gaming or doing remote learning, this 6E solution should be ideal because it is less likely to bottleneck anyplace other than your home’s central wireless connection.
If you’ve been struggling with either lower WiFi bandwidth than you’ve been paying for, or a lack of WiFi range with WiFi 5 or 6 products, this WiFi 6E solution could be just what the doctor ordered.
Because it addresses a bandwidth and network crashing problem I have, and because it is the most advanced mesh solution currently in the market, the Linksys Atlas Max 6E is my product of the week.