Dell has been providing both social "listening" and strategy
services to 10 clients on a test basis over the past year,
including the American Red Cross, Aetna, Caterpillar, Kraft Foods and
Clemson University. Now it's planning to make its services
available to both new and existing Dell clients.
The idea was borne out of Dell's experience as a social-media
practitioner over the past seven years, according to CMO Karen
Quintos. She pointed to the 2010 build-out of a "listening command
center" at Dell's Round Rock, Texas-headquarters to monitor the
company's roughly 25,000 daily social-media mentions as a product
it will incorporate into its new business offering.
"Customers regularly request our support to build and scale
their own social efforts based on what they have seen us doing in
this sphere," said Ms. Quintos in an email.
Dell has been making obvious strides toward becoming a more
services-centric company since at least 2009, when it acquired the
IT-services provider Perot Systems for $3.9
billion. Dell's services division now has 42,000 employees,
most of whom came from Perot, according to Richa Verma, Dell's
director of social-media services.
"They want to reposition themselves away from being the PC-based
hardware provider into a more strategic business services
provider," said Peter O'Neill, a principal analyst at Forrester. He
noted that Dell competitors such as Hewlett-Packard and
IBM are moving in
the same direction, largely due to the fact that it's become
difficult to convince enterprise buyers of PCs to switch brands,
since the underlying technology is increasingly similar.
Ms. Verma says the social-media space looks like a solid
opportunity for Dell based on what it's seen to date.
"The deal sizes may be small, but if you're looking at margins,
they're pretty much in line with what we see in the IP services
industry," she said.
The business of social "listening" -- monitoring and reacting to
what is being said in social media -- is a baseline service already
offered by myriad agencies, startups and big enterprise and
consulting firms, such as Accenture. If Dell wants to add related
activities such as community management, lead generation or the
infrastructure to manage brands' social-media presence, it may have
to make an acquisition, Mr. O'Neill said.
"I think most of the large enterprises have done their homework
on [it], though there's definitely still pent-up demand for this
knowledge in the mid-market," he said. "But I think within [the
last] 12 months, all the large enterprises -- and that really is
Dell's target , companies like themselves -- have already been
through the process."
Dell declined to say how many people are working in its
social-media services group, but Ms. Quintos said in an email that
most have thus far come from marketing and services groups.
To the extent that it now competes with agencies, Dell's new
business unit could put it in competition with its own agency
holding company partner, WPP.
"I think it's primarily focused on their own customers, so I
wouldn't necessarily say they're competing with us," said Paul
Dobson, a spokesman for WPP Team Dell.