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Technology Should Work Harder and Smarter

DUBAI - Michael Dell, the founder, Chairman and CEO of US technology giant Dell Inc., said on Sunday that technology firms need to cut back on maintenance cost and invest in innovation to power the next 
wave of efficiency.

In a keynote address on the opening day of the two-day Middle East CIO Summit 2009 being held at Dubai’s Madinat Jumeirah, Dell told a gathering of 120 top IT end users and decision makers from across the region that they need not only to cut costs, but deliver higher efficiencies to their customers in a business environment tainted by the economic downturn
 of 2009.

“To drive the next wave of efficiency, you will have to make sure that your technology works harder for the customers, which means you will have to innovate, but that is not going to be possible if 80 per cent of your total budgetary allocation goes towards maintaining your infrastructure.” This was Michael Dell’s

But for that to happen that they will have to not only simplify, standardize and automate their traditional architectures, but look beyond the legacy technologies that have created too many complications for their enterprises. “Too many top dollars are being used to keep the lights on,” he said.

“New applications come with their own data storage and infrastructure needs and all of a sudden decision makers have too many solutions in hand which they have to integrate and make sure that they work,” said Dell addressing the concerns of the CIOs battling to not only align their IT objectives to business priorities, but also cut costs. He pointed out that while the strategic use of IT is increasingly becoming a key driver of growth and competitive advantage, only a small percentage of the total IT spend is being allocated towards innovation, a situation compounded by the current 
economic climate.

Advocating that almost 30 per cent of an organisation’s IT spend be used for strategic development, Dell, urged organisations to embark on a journey to efficiency which will come about through a pragmatic consolidation and virtualisation of resources. “There is no point having multiple applications running for the same program. That’s a huge drain on resources. At Dell we were using close to 10,000 applications at one point of time, now we use just 3,000. Also when it comes to servers we have consolidated them in a 30:1 ratio. That is the sort of approach that drives down costs substantially for us as well as our clients.”

As for virtualisation, Dell bought home the fact that despite all the talk, only 31 per cent of the world’s servers had been virtualized and that there was a long way to go before that was achieved. While that would necessitate more expenditure, he warned the CIOs against harbouring illusions that “not spending money is saving money”. Virtualisation is becoming the new operating system of the data centre, he added.

“When you virtualise your servers you should have the capability to handle a lot of virtual data and therein lies the importance of cloud computing,” he says dwelling on a subject that has caught the fascination of IT decision makers globally. While security remains a prime issue of concern as far as public clouds are concerned, private clouds on the other hand are a surefire bet for enterprises looking to improve efficiency, he said.

Dell also called for a substantial redeployment of IT skills. “There’s no shortage of talent which can be used for driving innovation instead of maintaining legacy environments.”

Responding to a question whether the rapid growth in mobile computing will ultimately signal the demise of the PC industry, Dell declined to subscribe to that apocalyptic vision. “By some estimates there are about 4 billion people in the world walking around with cell phones, about 60 million with smart phones and a billion and half who own PCs. Tomorrow, there will be a huge chunk of that 4 billion who would want to dump their cellphones for smart phones, but are they also going to dump their PCs as well? I don’t think so. The PCs and smart phones will complement each other.” He also countered the idea that economic recession could affect a drastic slowdown of the IT industry. “The dynamics of our business are changing very rapidly, but I believe that the pace of change in our industry will only accelerate. Anybody who is looking for it to slowdown is in the wrong industry.”

Earlier in the day, EMC’s senior vice-president and CIO for the Middle East, Sanjay Mirchandani drove home the point that the integration of the data centre with the private cloud will help organisations become more dynamic, flexible, secure and cost-efficient. “Companies would also have to focus on agility and share best practices to offer better value to their customers.”

anshuman@khaleejtimes.com