Dell: The Action Hero Of Product Support

State-of-the-art software puts Dell on top of the service heap

As Hurricane Dennis threatened to crush the Florida panhandle last month, emergency responders weren't the only ones on call. Computer geeks from Dell Inc. (DELL ) stood at the ready, too.

From their state-of-the-art Enterprise Command Center (ECC) in Austin, Tex., Dell staff used Servigistics software and homegrown systems to pinpoint corporate networks in the storm's predicted path. As Dennis shifted, Dell adjusted plans to add 80,000 more servers and data-storage systems to its list, modeling problems they might face and sending extra repair parts -- such as hard drives and power supply boxes -- to local warehouses. The preparation helped prevent a widespread meltdown, say Dell execs.

The rapid reaction force is all part of Dell's push to become a major services provider to big corporate clients. From its four ECCs in China, Japan, Ireland, and the U.S., the Round Rock (Tex.) company can watch for PC and server outages, conduct technical evaluations of critical situations, and rally staff to manage crises. That's crucial because Dell promises some customers their crashed hardware will be restored in as little as two hours. Whatever the weather is doing, that means Servigistics software must guarantee that the right parts are in the right places. "[It] helps us meet and exceed our customers' expectations," says Doug W. Schmitt, Dell's director of enterprise service.

That sense of urgency -- and accountability -- is serving Dell well. With $2.31 billion in sales of hardware support services for corporate customers last year, Dell for the first time nosed out Hewlett-Packard Co. for the top spot in the U.S. hardware support market, according to Gartner Inc. (IT ) HP pulled in $2.29 billion in such services. Meanwhile, sales at Dell's U.S. corporate services unit grew 20.1% in 2004, compared with just 5.3% growth at HP. (Xerox Inc. (XRX ), the No. 3 services provider, declined 6.7% .) Dell is pulling ahead because "they do a better job at attaching support to systems going out the door," says Ronald G. Silliman, principal analyst for infrastructure support systems at Gartner. "The more product they sell, the more service is going with it."

Dell's secret is its ability to remain focused. Unlike IBM (IBM ) and others, Dell so far has avoided the trap of becoming a repair shop or tech consulting outfit for any company with a passel of mixed-brand servers and PCs. Instead, its enterprise command centers concentrate on one thing only: servicing customers with Dell computers and servers. Naturally, that means it only has to stock parts for its own gear, which helps the company hold down costs. "Any way they can find to standardize -- and drive down costs -- they will," says Silliman. From parts management to crisis control, service efficiency is the name of the game.

By Brian Grow in Atlanta

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