Dell Says Efficiency Drive Will Shrink IT Industry By £125Bn

Standardise, simplify and automate—those three words are at the heart of a strategy laid out 13 Oct at Oracle OpenWorld by Michael Dell.

Dell, CEO of the company that bears his last name, said he wants to battle inefficiency and reduce IT spending with what he called the “efficient enterprise.” Dell has spoken about the efficient enterprise in the past, but this time he announced that the company would aim to slash IT spending by $200 billion (£125bn) per year by focusing on ensuring that enterprises get the most out of their technology.

“There is $1.2 trillion spent annually on IT infrastructure,” Dell explained during his keynote at the conference. “Four hundred billion [dollars] on hardware and related software that comes with it, and $800 billion on labor and services. So for every dollar that’s spent on the hardware, you need [an] additional $2 … just to kind of make it all work.”

According to Dell, changing that goes back to the three words mentioned above.

“Standardisation is really about point solutions that leverage accepted industry standards to drive out the costs and inefficiencies from proprietary technologies,” Dell told the audience. “Simplification is all about making the complex simple. It’s about leveraging pragmatic solutions like virtualisation, like storage consolidation, to get the most out of your infrastructure.”

On the standardisation front, there is the adoption of x86, which has become the dominant platform in the data center, he said. When it comes to simplification, businesses can find savings through server consolidation, with virtualisation playing a significant role in that, he added.

The final area, automation, is about streamlining service delivery and enabling self-service IT models so critical business services can be delivered on demand, he said.

“We believe there is a real opportunity to drive out inefficiency and make technology work,” Dell said. He added, “It’s not just about reducing cost. It’s about improving productivity and efficiency and making technology work harder for the customers. It’s the efficient enterprise.”