Talent shortage could stifle Dell's move into services

Talent shortage could stifle Dell's move into services

A worldwide shortage of talented IT service technicians and consultants could apply drag to Dell's attempt to ramp up its IT services organisation, according to industry analysts.

IT service professionals already on the payroll of giants such as IBM Global Services, EDS, and Accenture pose a hiring hurdle for Dell as it attempts to staff a new IT service and support division that sources familiar with the company's plans said is currently under development.

"Dell faces a recruiting shortage. Even IBM is still having trouble finding qualified IT service people," said Rob Enderle, an analyst at Giga Information Group.

Dell's expected launch of its own professional services division is aimed at providing enterprise customers with consulting on best-practices, system deployment, e-business strategies, application integration, Web hosting, and other options that deliver cost savings and performance enhancements across multi-vendor platforms, sources said.

The division will deliver service and support above and beyond what Dell customers receive through a current IT services outsourcing agreement between Dell and Unisys. Dell and Unisys signed a US$1 billion deal last January for Unisys to offer expanded services offerings to Dell customers.

Industry sources point to Dell's recent hiring of Jeff Lynn, former vice president and general manager of Compaq's Global Services division, as an indicator that Dell is developing its own comprehensive IT service arm. While at Compaq, Lynn worked directly under Peter Blackmore, Compaq's executive vice president of sales and services, and was responsible in part for making Compaq into one of the top 10 global IT service organisations.

Lynn will now attempt to do the same for Dell, according to industry sources.

Dell representatives agreed that Lynn's presence in the company will add value to Dell's existing service and support efforts, but were unable to comment on any future IT professional services and consulting plans.

Industry analysts said the move into enterprise IT services could help Dell transform its image from one of a low-cost computer maker to that of a world-class technology company.

"There are some brand issues that Dell will have to overcome," Enderle said. "But it's certainly easier to build a services organization organically than it is to merge with another company, and now [with Lynn] they have someone with experience."

Dell representatives said Unisys' place as a "break-and-fix" service partner for Dell is still secure. A Unisys representative, meanwhile, was skeptical that Dell would be able to ramp up a high-end IT services organization fast enough to be able to do without Unisys in the near term.

Enderle agreed. "It's going to take longer than a year to just staff an organization at the level of a Compaq or an IBM," Enderle said. "To get to where IBM is today will take a half a decade."

A recent study from IDC shows that Dell has its work cut out for it if it wishes to compete with IT service providers such as IBM, EDS, and Compaq.

In the IDC study, Dell failed to make the top 30 list of the world's leading IT service providers by revenue. IBM was No. 1 on the IDC study, with Compaq, Hewlett-Packard, Fujitsu, and Hitachi all in the top 10.

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