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Break/fix maintenance disaggregation accelerates with profound business model implications for many

Consumerization of IT continues its inexorable march up the IT complexity stack

“Faster, better, cheaper” has been the IT hardware mantra for decades, and this continues pending the step-function increase in compute capacity that enterprise-grade quantum computing will bring to market before the next decade. Edge compute is little more than traditional distributed computing in smaller, more reliable form factors. Ultimately, edge computing hardware selection will become a derived decision in much the same way that cable television set-top boxes are a derived decision when consumers select a content provider for home entertainment.  

As TBR’s Tailored Services Group has heard during customer interviews, this device simplicity has large enterprise IT organizations beginning to view simple server and storage elements as practically disposable items. Here is where the service arms of hardware manufacturers face market challenges. They have created reliable, simple, low(er)-cost devices, and enterprise buyers are less inclined to pay a premium for their break/fix repair services given the lower number of outages that occur and the lower cost to the devices in general. This market condition provides a greater opening for third-party maintainers (TPMs) to gain share against OEMs, particularly when the OEMs have considerably higher operating cost models than the TPMs.

OEMs hope software abstraction and analytics monitoring and management systems will trigger operational challenges and potential barriers to TPMs

Single pane-of-glass management is another longtime aspiration in the industry and is rising to the fore as technology entrants large and small seek to develop the requisite software orchestration and management layers to run hybrid cloud environments. Within enterprise IT, this move to software management shells has reduced the need for siloed storage and server admins who can revert back to green-screen technology and provision instances. Instead, automatic provisioning occurs based on drag-and-drop templates. On top of this technology, companies build out performance management tools to be able to monitor workload performance and the underlying reliability of the physical infrastructure. IBM purchased Red Hat, for example, for its Swiss Army knife flexibility in this space. Hewlett Packard Enterprise (HPE) has taken the basic analytics assets gained in the Nimble Storage acquisition and slowly extended them out across more of the company’s hardware assets.

At issue now is TPMs gaining the access to these monitoring systems as well as the requisite training to know what the appropriate actions are to take when receiving these automated alerts. This could lead to litigation about access and data ownership down the road, similar to how the issue of spare parts access led to court cases in the 1980s, which were ultimately decided in favor of broader market access and legitimized third-party maintenance operations in the eyes of enterprise customers. For now, however, TPMs take different measures to work around the issues associated with interacting with OEM software shells when supporting enterprise customers. Some deploy third-party diagnostic tools from firms such as BMC and ingest raw log files. Others merely hire ex-OEM employees who are well versed in older core systems and build their own consolidated remote diagnostic centers.

TBR’s Tailored Services Group has seen rising interest in understanding the ways in which hardware maintenance providers go-to-market and operationally deliver break/fix repair services to enterprise customers. The fundamental simplifications and reliability improvements that triggered shifts in laptop and desktop service delivery models are coming to the data center. Further, some enterprises seek to hold onto server and storage assets longer as an interim step while migrating workloads to the cloud.

Beyond these consumption demand shifts, technology vendors, it can be argued, have become victims of their own success by manufacturing more modular systems with easier-to-navigate abstraction layers that reduce the frequency of critical outages. In short, response times become less critical given software-driven failover provisioning and as the diagnostic skills required on the ground become less challenging due to this increased software abstraction. All of these issues point to a radical transformation of the operating model best practices to deliver break/fix repair services to end customers, and that trend accelerates rapidly each day the world operates without a known vaccine to mitigate the spread of COVID-19. 

Dell EMC Services enables clients’ transformation to modern IT infrastructure environments

Dell Technologies’ core competencies remain rooted in products and infrastructure

The keynote sessions began with a Dell Technologies Capital update by Scott Darling, president of the venture arm. This group manages investments for all of Dell Technologies’ strategic business units, including Boomi, VMware, RSA, Secureworks, Virtustream, Dell EMC and Dell. Dell Technologies Capital has spent over $100 million in investments to broaden the company’s innovation ecosystem, taking various levels of financial positions in over 90 companies over the past six years. We believe Dell Technologies’ strategy of using this venture capital structure to spur innovation and gain access to creative new technologies across the startup community will play a critical role in the expansion of its strong market position as a key infrastructure provider enabling IT modernization.

Chairman and CEO Michael Dell also spoke at the event, discussing the topic of unlocking the power of data. He talked about how the company stores and protects more data than any competitor, and has the market opportunities to enable clients to extract value from data, from the edge to the core to the cloud. The presentation transitioned into a keynote by CTO John Roese that outlined six key areas of innovation that Dell Technologies will focus on to capture market share: powerful accelerated compute, high-performance data storage and protection, software-defined infrastructure, multicloud operating models, compute and analytics at the edge, and data mobility. The company will continue to invest in these six areas to make data and applications agile and adaptable to the large advances made in data generation through modern technology, and we believe this aligns nicely with the company’s overall goal of being the supplier of essential infrastructure across the globe.

 

The two-day summit began with a full day of keynotes spanning Dell Technologies’ (NYSE: DVMT) various lines of businesses and capabilities. The second day consisted of track sessions on infrastructure, client solutions, Internet of Things (IoT) and business innovations, including one-on-one discussions and small group meetings.