Dell deal with Microsoft will make PC giant the OEM’s OEM

12 Apr 2013

Dell vice-president in charge of the computer giant's OEM Solutions division Joyce Mullen

Dell has struck a major agreement with Microsoft to become a global distributor, outsource manufacturer and integrator for Windows Embedded products. The vice-president of Dell’s OEM Solutions division Joyce Mullen told the deal puts Dell in the driving seat for guiding change across a range of industry verticals.

Aside from the Dell products that consumers order online, buy in PC stores or that enterprises deploy across workforces, Dell – which is currently in the middle of a buyout deal to go private – has a thriving 15-year-old OEM business that manufactures customised machines and systems for other OEMs.

While Mullen wouldn’t disclose how much revenues the division brings in, it is nonetheless a multi-billion-dollar business that enables Dell to supply other OEMs across a myriad of verticals, from retail, industrial, medical, and transport. Every conceivable vertical, in fact.

“Dell is an OEM itself,” Mullen said. “But our OEM Solutions division is the business that we conduct to support organisations who have a requirement for compute power in their solutions.”

Mullen said the OEM solutions market is a global industry worth US$105bn and which is growing at a rate of 5pc a year.

She points out that while the PC market as we know it is in decline from a general business and consumer perspective, the reality is PCs and display devices continue to be in ready demand across most industry types.

“We believe the market for this is in the region of US$105bn, including the telecoms appliance business, storage acceleration, firewalls, industrial automation, factory automation, process control, video surveillance, healthcare, medical devices, retail point-of-sale kiosk solutions, vending machines …

“If you look very closely, a PC sits inside a lot of things we take for granted in the modern world as you go through life – ATMs, gas pumps – there is compute power in almost everything.”

She continued: “We are seeing a migration away from customers who have chosen to solder and build printed circuit boards (PCBs) of their own, for example, to customers who are looking for standard, off-the-shelf computers with their own brand and customised to support their and their customers’ needs as part of one overall solution.

“They want technology that keeps up with the trends but customised to meet their specific needs in the form factor they require. The concept is to leverage the broad Dell portfolio, as well as our buying power, rather than try to build a brand new system from scratch.”

Mullen said the deal with Microsoft to license Windows Embedded and install Windows in a myriad of OEM products streamlines the delivery of customised systems as it removes the need for multiple in-region suppliers.

“The licensing agreement with Dell simplifies our shared goal of simplifying IT,” explained John Doyle, director of product management for Windows Embedded at Microsoft.

“This licensing agreement with Dell exemplifies that shared goal, helping to streamline the supply-chain experience to make it easier and quicker for OEM customers to bring their innovative intelligent systems solutions and devices to market,” Doyle said.

Ireland is at the heart of Dell’s global supply chain activities

Much of Dell’s global supply chain business is co-ordinated in Limerick while the EMEA OEM Solutions business is based at Cherrywood in Dublin, where it employs up to 60 people.

The OEM Solutions division for EMEA is led by Dermot O’Connell, former country manager for Dell in Ireland.

“The whole OEM business actually started out of Cherrywood,” O’Connell explained. “A lot of new divisions for Dell, such as the Cloud Centre, tend to be conceived in Ireland.

“There is quite a lot of work involved in managing licensing agreements and hardware, and we work closely with the global supply chain team in Limerick, which is led by Sean Corkery.

“The OEM Solutions division, while it is only five years old in EMEA, is growing rapidly and we are tracking 5-10pc growth between the verticals we are tracking,” O’Connell said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years