Dell Cloud Business Applications: One Stop Shop for SMBs?

Last week at Dreamforce 2011 , Dell announced Dell Cloud Business Applications, a new integrated, single sign-on approach to business solutions aimed at small and medium businesses (SMBs) with 50 to 500 employees.

In the first release, Dell Cloud Business Applications include Salesforce CRM, Boomi technology to integrate Salesforce with financial applications (either on-premise and in the cloud) that SMBs are already running, including those from Intuit, Microsoft and Sage. The Dell solution also features an analytics dashboard (from an as yet unnamed partner) that provides SMB executives with an integrated view of their business by pulling in relevant information from both Salesforce and these accounting solutions. Dell will also serve as the single source of support–or “one throat to choke” for the applications in the Dell Cloud Business Applications portfolio. The offering also features a single invoice, monthly billing and financing plan., Dell Boomi integration and Dell implementation services are included in the initial release, available now. Dell Cloud Integrated Analytics service will become available in the first half of 2012. Pricing for licensing is based on Salesforce monthly per user subscription pricing, plus a monthly Boomi subscription fee and reporting fee, as shown in Figure 1. Fixed scope, fixed fee services pricing ranges from $5,000 to $14,000 for CRM implementation and from $2,000 to $10,000 for Boomi implementation packages. Additional services, such as custom reports/analytics, data cleansing and debugging and custom connectors are fee-based depending on requirements.

Figure 1: Dell Cloud Business Applications Licensing Pricing for 10 users

Module Description Annual Fee CRM, Professional Edition Salesforce CRM cloud application $7,800
Pre-built Boomi connectors (2 sources, fixed) Synchronize data between Salesforce CRM and accounting software $6,600
Reporting (10 users, 2 sources, fixed) On-demand reports and alerts $2,400

Over time, Dell intends to broaden this offering with additional cloud applications to satisfy requirements in other functional areas, such as marketing automation and financials, slated for the second half of 2012. The service will initially be available in the U.S., but Dell intends to expand it globally.

The offering is available direct through Dell, and through Dell Boomi partners certified to sell and implement the solution. Dell plans to recruit additional partners to sell and deploy the solution over time.

What’s Behind Dell’s Approach?

Dell Cloud Business Applications build on several core Dell strengths, including:

  • Increasing focus on offering solutions tailored to SMB requirements, such as its Vostro line and KACE appliances.
  • Expanding cloud footprint, including its announcement at VMWorld that it will launch its first public cloud offering later this year, hosting VMware’s new vCloud public cloud systems in Dell data centers.
  • Experience in designing, building and delivering cost-effective, standardized systems.
  • Expertise in Web-based and direct sales.

In addition, Dell is anchoring its Cloud Business Applications approach on a few key premises:

  • SMB adoption of cloud solutions is growing, but integrating cloud apps with both existing on-premise software and other cloud applications is still too difficult and expensive.
  • SMBs don’t have analytics and reporting tools that easily pull in data from across different business applications to provide visibility across different business functions.
  • Moving to the cloud and selecting the “right” cloud solutions is difficult for SMBs, who may lack the time and/or expertise to evaluate different cloud applications, integration technologies and analytics tools.

Dell Cloud Business Applications give SMBs a hand-picked set of cloud apps, turnkey services and built-in, cross-application analytics and support, designed to relieve SMBs from the hassles and costs of selecting, deploying and managing different solutions from multiple providers. By pre-selecting cloud solutions, Dell hopes to relieve SMBs from the confusion, time and effort necessary to evaluate the myriad of cloud solutions on the market, integrate them with existing accounting solutions. Dell’s analytics dashboard incorporates data from Salesforce and accounting, to give users a more complete picture of what’s going on in their businesses. Finally, Dell is providing a one-stop shop, both to buy new cloud solutions, get them integrated with the current accounting system, and support for Salesforce and the integration.

Who’s the Competition?

Dell Cloud Business Applications faces a lot of competition from several far-flung sources:

  • Local VARs and SI partners, who offer SMBs integration (albeit typically one-off) and support. While Dell is trying to woo these partners to its fold, Dell has yet to disclose its strategy is to recruit and compensate partners. While the Boomi channel is a good start, Dell will likely need to grow the channel for this service significantly to reach the many SMBs who depend on local partners for IT infrastructure advice and service.
  • Traditional SMB business software vendors–including Microsoft and Sage–who offer hybrid solutions and pre-built integrations between their own front and back office solutions.
  • Integrated cloud suites, such as NetSuite and SAP Business by Design, which provide back and front office solutions built on the same code base and therefore integrated out of the box.

Will Dell Cloud Business Applications Hit the Mark with SMBs?

As structured today, Dell’s offering will appeal to SMBs who want to add Salesforce CRM, intend to continue using their existing accounting solution, and want a one-stop shop for both Salesforce CRM and integration with their accounting solution. Pricing for SMBs with more than 50 employees–which is where Dell is aiming–is reasonable as well.

And there’s no doubt that Salesforce wants to leverage Dell–a
nd Intuit, for that matter–to help it sell and service the SMB market. However, for all of its CRM dominance, Salesforce isn’t they only game in town, and seems to becoming more focused on large enterprises. Though it says that the 100,000 companies using Salesforce are split evenly between large, medium and small business, large companies account for the majority of user seats. Do the math: of Salesforce’s one million users, 100,000 are from Dell, which is its largest account. Add in a laundry list of other big companies, such as Cisco, Sprint, Hitachi, NBC Universal and Prudential, stir in Salesforce’s recently announced one-off enterprise licensing plans, and its only natural to wonder if Salesforce is outgrowing SMBs.

In addition to be huge, the SMB market is also very diverse. How will Dell come up with a formula to pick the “right” for a large enough percentage of SMBs, across a myriad of solution areas, from marketing to HR to ecommerce? Let’s face it, one size does not fit all. It will become even more difficult to pick winners as Dell expands into new geographies.

In my opinion, while Dell doesn’t need to build out the portfolio to include hundreds or even dozens of applications, it does need to offer at least a handful of selections in each category to most effectively tap the huge SMB market potential.  After all, most customers want a choice. It also needs to give customers a forum to provide input–to review apps and make suggestions for what they’d like to have.

Dell can further strengthen this offering by offering service and support for SMBs’ existing on-premise IT infrastructure and solutions in a remote managed services model. In fact, Dell already offers these capabilities in Dell Managed Services.  This would truly straddle the hybrid world of computing that most SMBs will continue to occupy for the next few years.

Finally, Dell needs to clarify the value proposition for VARs and local and regional SIs to get them on board and reaching out to their SMB customers with Dell’s offering.

That said, Dell’s growing commitment to the SMB market  is not to be underestimated—nor is it’s climb into the cloud (or as Dell puts it, “the virtual era”). Dell Cloud Business Solutions is a good first step into becoming an SMB cloud services provider.  Over time, Dell can build on its core strengths and the benefits of a closed loop marketing and sales model to shape Dell Cloud Business Solutions to meet the needs of a wider swath of the SMB market.

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