‘Infrastructure is the most important investment for innovation’

‘Infrastructure is the most important investment for innovation’

If SMEs have learned anything from the corona crisis, it’s how to innovate. Business models came under pressure and many companies were forced to close doors. As a result, many new business models were invented and implemented. What can we learn from this, and how will it develop in the near future?

To learn how a company like Dell Technologies perceives the development, we sat down with Danny Jansen, Manager of Medium Business at Dell Technologies. Ultimately, the tech giant is one of the key suppliers of hardware that makes innovation possible at all. Jansen says: “Initially, the SME sector played close to the vest. Companies wanted to wait and see how the situation would develop, especially during the first lockdown. Only when governments came up with state aid programs, and it became clear that these programs would offer long-term support, companies dared to invest again.”

As soon as SMEs start investing again, the economy picks up. According to Jansen, that’s what happened when it became clear that state aid programs were able to help SMEs. In a short period of time, Dell Technologies had to advise many customers about the infrastructure required for different digital business models. Many companies opted for an e-commerce driven approach. Together with Intel, Dell Technologies reviewed the most fitting Intel processors in PowerEdge servers for e-commerce purposes. In addition, the companies looked at how VMware Cloud Foundation can be deployed based on VXRail.

Investments in workplaces held off for a long time

What we found striking is that SMEs haven’t invested much in new workplaces, which came up in our conversation with Jansen. Naturally, during the initial lockdown, companies invested to compensate for possible shortages and ensure that everyone could work from home. But there were also many companies that allowed personnel to take away entire desktop PCs, monitors, and office chairs.

It wasn’t until the fall of 2020 that Dell Technologies saw that companies started to think more about the home office and upgrades or improvements of equipment. Ultimately, the most important thing is that people can comfortably and efficiently work at home. Sometimes, the requirements for that are different than in the office. For example, we recently wrote about the Dell OptiPlex Ultra. This Intel-based PC has been incorporated into the monitor base by the manufacturer, so that the PC itself does not take up any extra space. Very innovative and nicely solved.

New infrastructure mainly fits hybrid cloud strategy

Jansen tells us that the vast majority of innovation projects are focused on infrastructure. Most companies opt for a hybrid cloud strategy. “Companies are making more conscious choices for their infrastructure, wherein the number of clouds is reduced rather than increased, but always combined with a data center. Security plays a big role in this. The more clouds you use, the more silos you have to secure. If you work with one cloud and one data center, it’s easier.”

AI and machine learning are starting to gain a foothold in SMEs

Something that Jansen didn’t expect but happened nonetheless, is that SMBs are starting to take steps in artificial intelligence (AI) and machine learning (ML). Dell Technologies saw a sudden increase in the purchase of servers with AI and ML capabilities. These are servers with Intel processors, supported by Intel Xeon Phi co-processors or Nvidia Tesla GPUs. It’s definitely not happening in every sector, but it is in the medical world, where small companies suddenly and rapidly become big due to their medical expertise. AI and ML have helped tremendously to automate or solve that growth through innovation. Jansen predicts that this will open the door for more sectors.

Many more investments in the coming year

Jansen expects that companies who only innovated part of their business, will now start looking for more opportunities. On the other hand, there are companies that have done very little, and suddenly start seeing competitors making moves because of innovation. That will force them to innovate as well.

Dell Technologies expects that the ball has started rolling and that companies will innovate more quickly. Outdated business models and infrastructure are being abandoned. For example, Jansen sees that many customers stop using their own data center. Outsourcing the data center to a managed service provider with a proprietary data center is increasingly popular. Ultimately, this relieves the internal IT team of a huge burden, allowing a greater focus on innovation.

Tip: Dell Technologies APEX offers IT-as-a-Service for hybrid and multi-cloud

It becomes clear to us that Dell Technologies expects a lot of innovation in infrastructure. Jansen says: “Infrastructure is the most important investment for innovation, especially in the form of hybrid cloud.” Yet, Jansen also indicates that many companies will start to iron out their remote working strategy. Thus, they will also start looking at ways to innovate their workplaces — for example, through VDI solutions and new clients.

What about the chip shortage?

As Dell Technologies expects the innovation ball to have started rolling, we wondered about the chip shortage. Won’t this lead to even bigger shortages? Jansen confirms that there are definitely shortages on the market. That’s no secret either. Even Intel’s CEO, Pat Gelsinger, has indicated that the shortages will not be solved before 2023. There are shortages in many areas, not just Intel processors. All IT components are under pressure, from hard drives and SSDs to monitors and motherboards.

Therefore, we asked Jansen whether companies are able to invest in their infrastructure at all. He argues that Dell Technologies has a very good supply chain that’s impossible to halt. According to Jansen, the most simple and optimal way for customers to respond to the chip shortage, is to be flexible in their choice of hardware in case it is needed.

Some companies always want an identical server, with the exact same components, such as a processor, RAID card and hard drives. In the case that a specific Intel processor or hard drive is currently unavailable, their order may take a little longer. Suppose one always chooses a 2TB hard drive. For them, choosing an available 4TB hard drive can be a solution. Similarly, they can opt for a hard drive from brand X instead of brand Y. Also, in terms of Intel processors, there are many different models. Typically, there’s an equivalent or better model available. If customers have that flexibility, plenty is possible.

The big advantage of a player like Dell Technologies is the volume in which it can buy. “This also allows you to offer price stability and, thereby, assurance to your customers”, says Jansen. Of course, it’s difficult to predict how long the chip shortage will last and whether we’ve reached the all-time low yet. We’ll have to wait and see.

At the moment, the chip shortage has no effect on the innovation that Jansen foresees among customers. If there are opportunities to innovate, now is a good time to capitalize on them.