Six attributes of efficient OEMs

How smart OEMs use support services to build strategic advantage

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In particular, Dell OEM Solutions has found that a company’s use of third-party service partnerships can be especially telling. The most efficient OEMs tend to be support-smart, leveraging OEM Solutions beyond the savings that can come from Dell designing and providing a hardware platform with fulfillment and logistics services. They see reliable support partnerships as a key to reducing costs, and use support to help gain competitive advantage in a number of important ways.

This white paper examines some of the attributes that make an OEM efficient and pinpoints the Dell OEM solutions that support those attributes.

Characterizing the efficient OEM

The most efficient OEM companies save money by leveraging the right product warranties and service partnerships—a key advantage given how important cash can be to a business and its ability to seize new opportunities. By not making a huge outlay of cash up front to build service infrastructure, and by exercising the option to use managed services, these companies are in a better position to outpace their competitors.

Doing more with what you have is always an important goal—one that can help make the difference between business success and failure. But how many businesses are able to translate that goal into reality? How many are truly efficient? While criteria may vary, extensive experience helping companies to produce and support their products has given Dell™ OEM Solutions deep insight into what makes an original equipment manufacturer (OEM) efficient. Dell has seen time and again that some OEMs consistently know how to allocate their capital and other resources where they can do the most good.

But what leads some companies to make the right decisions while others do not? Based on insights gained through more than a decade of experience, Dell OEM Solutions has identified six attributes or characteristics shared by many highly efficient OEM companies. These companies capitalize on being focused, agile, differentiated, responsive, flexible, and scalable.

Focused

Many of the most efficient OEMs play to their strengths by focusing on intellectual property and innovation.

“We never wanted to worry about hardware quality or performance...Now we can concentrate on our value-add, which is producing innovative software.”

Bill Culman, Vice President of Engineering and Operations, QuorumLabs

Efficient OEMs understand their true value in the marketplace. They do what they do best, such as creating great software products, and develop ways to evaluate and innovate when it comes to non-core activities. Evaluating their options is a primary indicator of efficiency—thinking hard about what choice makes the most sense for them financially and operationally.

Some ultimately decide that the costs of providing customer support services entirely on their own are greater than providing some support services through a partner. For example, companies may find that maintaining a global support infrastructure causes a drain on capital that could be better spent developing new products. For those that make this decision, there are important benefits to choosing Dell as a partner. The OEM can remain the single point of contact for its customers, yet leverage Dell’s global support infrastructure for parts and labor.

The OEM can deploy tech resources by using Dell behind the scenes and benefit from around-the-clock comprehensive customer support services, with a network that requires no up-front investment. In this way, the OEM can better preserve its capital position and remain competitive. The OEM has more resources to invest in engineering and R&D, for instance, instead of opening and staffing its own service locations and parts depots.

Operational cost savings can occur in multiple ways. First, Dell hardware quality is

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designed to keep service calls to a minimum. With quality control standards that exceed many in the industry, Dell helps reduce the burden of managing resources for service functions. Second, the Dell in-field repair and spare parts program allows OEMs to quickly resolve service issues without having to bear the cost of hardware replacement inventory. For instances in which the OEM needs the highest level of phone support and escalation management, but does not have a need for on-site support, Dell OEM Solutions will collaborate on a custom solution to meet the customer’s needs.

Many companies are able to further reduce service time and cost by designing serviceability into their products up front. For example, the product design ensures that front-side LED indicators are visible by service technicians at a glance, and field-replaceable units such as fans and hard drives are readily accessible. Tool-less chassis designs are also common. The result: efficient service and lower costs for the OEM.

“Our customers can avoid significant downtime...Meanwhile, we avoid the costs of shipping replacement appliances, the need to stock replacement units in our inventory, and the time to repair hardware by working with Dell ProSupport.”

Bill Culman, Vice President of Engineering and Operations, QuorumLabs

Agile

Efficient OEMs are able to expand into new markets and capitalize on new opportunities without having to build redundant support infrastructure.

“We needed an OEM partner that could deliver global support so we could accommodate organizations throughout North America and Europe. We can support our customers effectively and efficiently everywhere we do business.”

Stephen Catanzano, CEO and President, Inboxer

Many fast-growing companies face a situation in which their product is highly successful in one market area, but they lack the local presence and expertise to support their product in another part of the world. By using a support partner when it makes economic sense, they can more quickly and easily enter new markets or regions to capitalize on opportunities. They seize these opportunities by not waiting to build up a service presence of their own, and by not limiting themselves based on the cost of an expanding market share.

Rapid growth doesn’t have to mean service suffers. Companies can expand their business into new geographic regions while also reducing repair time with Dell’s global integration and fulfillment services and worldwide support infrastructure.

Additionally, knowing that an OEM product is built on a Dell platform and supported by Dell can help close sales with large enterprise customers in geographic areas where the OEM is not yet well known. Dell OEM Solutions understands the requirements of different industries and the customs and expectations of different countries, and is ready to help the OEM fit in and succeed. Beyond understanding unique support requirements in various countries, Dell OEM Solutions helps customers get their products to market faster with simplified testing and regulatory certification processes.

“We can reliably expand to new geographic regions and deliver outstanding comprehensive support to our worldwide customers thanks to the global reach of Dell support.”

Chris Petersen, Co-Founder and Chief Technology Officer, LogRhythm

Differentiated

Many efficient and successful OEMs offer differentiating support services that can help drive new revenue streams.

“With Dell, we can deliver much better service than we could before...I anticipate that it will help us gain market share. By working with Dell, we can compete and win against some of the major players in the industry.”

Andy Eloff, Vice President, Raw Thrills

Efficient OEMs understand that superior service is one of the most effective ways to set themselves apart from competitors. They look

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for ways to drive additional revenue through profitable support services customized to meet the demands of their customers. Tracking customer support status can be a key to revenue generation.

Successful OEMs realize there is a huge market to be tapped based on understanding their customers’ technology life cycles. For example, if an OEM knows that customers will use its products for approximately six to seven years, the OEM may offer extended warranty coverage. This offer can be made either at the time of sale or by proactively reaching out to customers when initial warranties are about to expire. Extended hardware warranty service can provide additional profit for the OEM and can be aligned with extended coverage for other elements of the solution including software licensing and support.

Making the offer of extended coverage also restarts the conversation between the OEM and its customers. Even if a customer decides not to extend the warranty, the renewed conversation provides an opportunity for the OEM to discover other opportunities—such as new Requests for Proposals (RFPs) that the customer may be planning to send out.

Efficient OEMs can also differentiate themselves from their competitors by helping their customers maximize productivity—proactive problem avoidance, remote monitoring, and self-support features like those offered by Dell enable the OEM to ensure continuous uptime for mission-critical systems. Customers purchasing OEM products may have

exceptionally high expectations in terms of uptime. In fact, many large customers have stringent service-level agreements (SLAs) built into their RFP documentation. With the help of Dell OEM Solutions, OEMs can compete for profitable but high-SLA customers and provide assurance that those requirements can be met.

Another competitive service advantage is having access to the Dell Web site, which provides a highly regarded, one-stop shop for Dell platform documentation, video-based teardowns, script-based troubleshooting, BIOS and driver updates, and other support tools.

“Global support is a big issue for us and the quality of Dell’s support is a real differentiator...Dell ProSupport offers direct issue resolution at the customer’s site, which gives our customers confidence in their systems.”

Alexander Gun, Head of IT Service, EXASOL

Responsive

Efficient OEMs deliver responsive, reliable, and seamless customer experiences.

“100 percent of our appliance-based customers benefit from Dell 24/7 support for quickly resolving any potential hardware issues. Using Dell field services for hardware support helps us increase our operational efficiency, but more importantly, it helps meets the mission-critical requirements of our customers.”

Shahar Layani, VP, Professional Services, North America, Cyber-Ark Software

Efficient OEMs know that fast response and reliable service are key elements for retaining valuable customers and acquiring new business. OEMs can deliver significant improvements in field service response time to their customers, greatly increasing customer satisfaction, by leveraging Dell OEM Solutions.

For an efficient, seamless customer experience, OEMs can structure service so that they maintain primary customer contact while smoothly escalating calls to the support partner. With a customized queue, Dell involvement can be completely transparent to the OEM’s customers. The OEM handles the initial customer call and then initiates a soft handoff to Dell for additional levels of support.

OEMs often cite security as another potential consideration in their support model decisions. Many OEM customers have sensitive data, and using Dell to avoid the need to ship appliances for repair helps safeguard that data. By the same token, if an OEM prefers that a proprietary appliance not be opened outside the OEM factory, Dell can accommodate that approach to security as well.

Finally, OEMs want to give their customers the most prized outcome of all: peace of mind. Customers of Dell-supported OEM products can provide that to their customers and concentrate on their own core competencies, knowing that their systems will operate smoothly well into the future.

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“By working with Dell Support Services for OEM, FalconStor customers are able to protect their IT investments and maximize their performance.”

Eric Chen, General Manager, FalconStor APAC Operations

Flexible

Efficient OEMs provide flexible support options to meet the unique needs of their customers.

“Dell has always kept to a four-hour response wherever it’s been needed. This really differentiates Dell from the competition because other firms aren’t as flexible. It means a lot to our customers and we’ve seen positive feedback.”

—Dirk Vandenhirtz, CEO, LemnaTec

Many of the most efficient OEMs recognize that their customers also want to be efficient—they enable customers to purchase just the level of service they need by offering a choice of service plans. Dell can help OEMs select from a variety of field service plans, including four-hour on-site response in over 100 countries around the world. Warranty coverage can be extended by length of years, speed of response, and other factors to fit the customer’s specific requirements. Dell has more than 30,000 people in tech support, parts, and field service who are at the OEM’s disposal to perform service and replace parts on short notice.1

Collaborative troubleshooting and service escalation can also be customized to fit the OEM’s unique service model. Many OEMs prefer to handle the initial customer call and then initiate a soft handoff to Dell for the second and third levels of support. An OEM can deploy tech resources by using Dell behind the scenes or in the front line on their behalf.

If an OEM’s technician decides that the OEM product requires hardware break/fix service, that technician can use the Dell Online Self Dispatch (DOSD) tool to send Dell parts and labor to the customer location without having to contact Dell OEM Solutions. This shortens the service call time, ultimately saving money for the OEM. It also improves perceived service quality, because the service is quick and the OEM does not have to disconnect the customer to call Dell.

When OEMs have an especially complex product, they can divide support services between their own technicians and Dell support personnel. Dell technicians could respond to computer requirements such as a hard drive replacement, while the OEM’s more costly specialized technicians could remain responsible for the other portions of the device. The OEM would be able to reduce service costs by limiting its own technicians to only those repairs requiring advanced knowledge of the OEM system.

Efficient OEMs also have the flexibility to increase support for initial test units deployed at a customer’s location, and then provide more economical but still responsive support choices like four-hour or next-business-day service once the platform is fully debugged and stabilized.

“If our solution has an issue, it can affect the whole organization. We need the best support for our software and our appliance. Dell delivers on both.”

Adam Bosnian, Executive Vice President of the Americas, Cyber-Ark Software

Scalable

One of the key strengths of efficient OEMs is the ability to quickly scale support operations through reliable third-party service relationships.

“We know that Dell support will scale well as we gain customers.”

—Andy Eloff, Vice President, Raw Thrills

Sometimes rapid success can catch an OEM off guard when it comes to provisioning for customer support. Support service requirements can grow exponentially as products gain traction and sales take off. Under these circumstances, how can an OEM grow efficiently, profitably, and with minimum risk?

Many successful OEMs grow efficiently by tapping into as much outsourcing support as they need at each step of the way. For example, it is entirely feasible for

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an OEM with just a single U.S. support location to serve customers worldwide. The OEM’s U.S. operators can dispatch a Dell part and an engineer on-site in China—or anywhere the company’s growth takes it.

Efficient OEMs can also grow profitably, because warranty cost is built into each Dell box and remains static and predictable as the OEM scales. For example, there is no additional cost for increased use of services such as Dell Online Self-Dispatch as the volume of support increases.

Using partner support services can mitigate the risk inherent in expansion by limiting the capital and human resources that OEMs must invest in expansion efforts. OEMs can leverage the Dell network instead of hiring additional technicians themselves and rely on Dell knowledge and experience to smooth the way into new countries. They can hand off the complexity of warehousing and supplying parts as part of the Dell service contract. These OEMs also have a single point of accountability to troubleshoot hardware problems as they grow—someone that understands their businesses and end-user requirements.

“Because we ultimately planned to sell the Xdream around the world, we needed a partner with a global presence that could provide distribution and warranty support services wherever we sell the product...We estimate that we are saving 30 percent of our per-unit costs by sourcing and supporting products in each geographic region through Dell OEM Solutions.”

Paddy Murray, President, Trixter North America

One size does not fit all

Dell OEM Solutions offers several categories of support services, enabling OEMs to tailor the right amount of parts and labor support for their needs.

Hardware Support

• Dell Basic Hardware Services—Companies receive hardware repair and replacement during local business hours, the most basic level of support. While Basic Hardware Service is a start to maintain equipment, most OEMs benefit from enhanced levels of support.

• Dell ProSupport™ for OEM—Dell ProSupport for OEM provides 24/7/365 support and includes a 90-day warranty extension, at no additional cost, available exclusively on OEM-ready and Extended Live hardware. OEMs can select the speed of response, the level of protection, and the amount of proactive support required to meet the needs of their customer base—for example, four-hour, next business day, or other service-level agreements (SLAs) for parts and labor, collaborative hardware and software support, and escalation management (see Figure 1).

• Multivendor Support—OEMs can take advantage of the award winning Dell ProSupport™ level of service on all assets in your multivendor installed base, not just your Dell assets. Consolidating your hardware support under one service contract simplifies support for your installed base and saves you money, effort, and time.

Additional Services

• Dell Online Self Dispatch—OEMs can use this Web-based tool to self-diagnose and send Dell parts and technical personnel to a customer location themselves, without having to contact Dell OEM Support services.

• Dell IT Advisory Services—OEMs receive a designated support contact to help manage escalations, collaborate on custom service plans, and provide service reporting across their installed base.

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Capitalizing on support services with Dell OEM Solutions

One of the most important decisions an OEM can make is the type of warranty and support service chosen for its product. Dell OEM Solutions helps companies of all sizes in a wide range of fields to bring their products to market faster and expand business volume through smart warranty and support choices. With Dell OEM Solutions, companies can combine industry-standard Dell hardware with customized design and branding to produce a powerful, reliable, and innovative product.

Start strengthening your customer relationships with a support-smart service infrastructure today. Dell OEM Solutions is ready to work up front or behind the scenes for your solution, helping you to showcase and extend your value to your customers.

For more information

Find out more about what Dell warranties and OEM support services can do for you. For more information, contact your Dell OEM Solutions representative or visit: dell.com/oemservices.

Companies can take advantage of a comprehensive selection of services. Dell OEM Solutions offers a flexible suite of support services delivered via Dell’s global support infrastructure (see the sidebar, One size does not fit all).

Building a support-smart organization

It all adds up to being smart about customer support—knowing when to use managed services instead of putting more demands on in-house tech support teams, and understanding that resources saved through an effective customer service partnership can be funneled back into core product innovation.

Figure 1. Comparison of Dell Basic Hardware Service and Dell ProSupport

Local business hours support ü ü

Basic hardware troubleshooting ü ü

Multivendor hardware support + +

Next-business-day parts and on-site response + ü

24x7x365 support ü

In-region support ü

Hardware and software support from advanced technicians ü

Customer self-identified severity level 2 and 3 ü

Remote troubleshooting and diagnostics ü

Application/software how-to and troubleshooting ü

Getting-started assistance ü

Designated escalation management ü

ProSupportBasic

+ = Optional

Avaliability and terms of Dell Services vary by region. For more information, visit www.dell.com/servicedescriptions

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1 All claims based on 2/15/2010, annual summation of GSS Capabilities Information, populated by Dell internal GSS Core Team members. Availability and terms of Dell Services vary by region. For more information, visit www.dell.com/servicedescriptions.

© 2011 Dell Inc. All rights reserved. Reproduction of this material in any manner whatsoever without the express written permission of Dell Inc. is strictly forbidden. For more information, contact Dell.

Dell, the DELL logo, the DELL badge, and ProSupport are trademarks of Dell Inc. Other trademarks and trade names may be used in this document to refer to either the entities claiming the marks and names or their products. Dell Inc. disclaims any proprietary interest in trademarks and trade names other than its own.

September 2011