HP Versus Dell: It’s Pay Me Now or Pay Me Later

This blog entry contains a series of questions DCIG posed to Andy Johnson, OEM Product Manager at Bell Micro. Andy maintains a business development role for Bell Micro and has responsibility for Bell Micro’s branded solutions with a strong focus on Bell Micro’s HP relationship. In this interview, Andy gives us insight into how Bell Micro is working with HP to satisfy the OEM market and in particular how Bell Micro and HP provide solutions that differentiate it from the competition.

DCIG: Andy, firstly, why don’t you tell us what your main role at Bell Micro is and what you plan on accomplishing?

Andy: My charter is to enable Bell Micro’s field sales organization to successfully grow. I am a customer facing resource whose main goal is simply to figure out how to spend 70% of my time talking to customers about programs and supporting the sales team. Based upon that interaction, I determine what kinds of tools Bell Micro need to have in place and what kind of campaigns are needed to generate demand in our market to sell a boatload of HP product.

DCIG: When we look at the OEM business out there right now, it seems to be categorized or split between OEMs that require appliances and those that are looking to build their own. How do you see these two different categories of OEMs?

Andy: On the appliance side I think there are those out there who should, whether they know it or not, be looking at an appliance strategy. For instance, we have seen companies in the security market be very successful with appliance plays. They are really a software company at heart so when you take their software and load it up on an x86 platform, it becomes an appliance. Those who haven’t made the move to an appliance platform should consider the move as it could solve many problems for them such as:

  1. Simplify field support so they don’t have to support their product on every platform out there – they just have to support their appliance
  2. It has the benefit of driving top-line revenue for them.
  3. There is benefit of selling something that isn’t just a piece of software. It has substance to it so they can brand it, make it their own and people see it when they walk into a data center.
  4. It differentiates them from the competition.

DCIG: What about those OEMs that are looking to build something?

Andy: This other segment of OEMs are those who are looking to build a solution that has a proprietary hardware element to it meaning that it isn’t just a software solution. Maybe they have a card of their own that they want to drop in to leverage the x86 architecture as a way to speed their time to market.

The choices are different for these OEMs on the hardware side as these companies, or more precisely their engineering teams, have typically grown up designing their own computing or processing architecture and controlling it via a real-time operating system such as Wind River or something similar. This is fine except for the fact these companies have to find resources with a somewhat specialized skill set.

If, on the other hand, you look at the x86 architecture and now decide to use some version of Linux, the OEM can draw from a vast pool or resources in the labor pool who understand Linux kernel development or Linux application development. These individuals are relatively easy to find and will cost less money to develop and support the product.

DCIG: This whole idea of going into the appliances is a little new for the Bell Micro sales team and certainly is something Dell has been doing very successfully. What do you perceive as Bell Micro’s biggest obstacles to being successful?

Plain and simple, it’s the ability to position HP well against Dell as Bell Micro’s sales force just hasn’t had a lot of practice positioning either a white box or an HP solution vs. Dell. The sales force is accustomed to taking our white box solution out against Dell and getting beat up and then not winning.

Customers have matured to where they see the advantage of an industry standard platform, and HP is far superior to Dell.  We need to develop a set of target customers within different geographies and then go in and talk to those customers about HP and an appliance infrastructure built around HP.  We have such a compelling story that it’s all about getting in front of customers, hearing someone like me tell the story, getting a couple of wins, and then replicating what works within the sales team.

So, when you get in front of customers, and let’s say Dell comes up, what kind of message are you trying to convey?

Andy: So the dynamic that is at play, when you’re talking to someone about HP and they are also considering Dell, many customers see HP and Dell as having, on the surface, a similar service offering. For instance, you can go to Dell or HP and get 24×7 onsite support. What I like to talk about is what the service strategy is for a company. HP’s strategy is to invest in engineering and to design the most reliable platform possible with the goal of not having service events to reduce service costs.

At Dell, who is by the way really just an integrator and not really doing the engineering of solutions, they offer the same level of service and do a good job at showing up and meeting their SLAs but they’re spending more on supporting the service call. So the real question we try and ask a customer is: “What do you really want and what is your cost of downtime?” If we can turn a customer’s focus from inexpensive hardware to talking about the reliability of the platform and how you will need to exercise your service contract less, we can quickly prove the value of HP.

DCIG: Give us a few proof points.

First and foremost an OEM gets the acclaimed HP engineering with industry leading MTBF. This means you’re going to have fewer failures and increased uptime. Also remember that just because someone shows up to fix a problem does not necessarily mean the problem is fixed.

For instance, if it’s a part of the platform that Dell doesn’t really own from a development perspective (by the way, this includes all of the hardware components) and they have to go through several other organizations in order to get help to fix the real issue, how does that really help the customer that has a critical piece of equipment sitting idle?

With HP, you are more likely to get a badged HP employee that shows up in the HP service plan and they have access to the HP engineering community that developed the product. With Dell they are contracting with somebody for the onsite support. What I want to communicate is that not all services are created equal. HP will make the investment in over engineering the product so you have fewer service events while Dell is going to spend money supporting the service event.  

DCIG Final Thoughts:
For OEMs, looking for a trusted and reliable partner can lead down two similar but completely different roads. The old saying “Pay me now or pay me later” clearly resonates with many organizations that find it difficult to justify costs today that may never need to be paid in the future. With budgets tightening, companies will need to weigh up-front costs against the potential of lost revenues to down systems or lost customers. Together, Bell Micro and HP are driving a stake in the ground and betting that OEMs will be looking for a superior engineered solution that is more reliable and highly available and can stand the test of time.

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