I just met with a prospective client in Dell’s EBC that had grown a top notch engineering team. The team was showing off their next-gen design, and it was a comprehensive Wintel based system with a great security story. After the client went over their system design, our engineering manager for Dell’s OptiPlex product pointed out that Dell’s next-gen OptiPlex products were a perfect fit as they had a very similar architecture that met and even exceeded the specs required
This is not uncommon in the OEM business with increasingly commoditized x86 platforms, but it is an awkward moment for some customers. You never want to have two engineering teams looking at each other saying they are working on exactly the same thing, as it just stinks of redundancy (the bad kind). However, knowing is half the battle.
Now that the customer had discovered this redundancy, what should they do?
If the two teams work for the same company, then (in theory) they pick the best solution and move on. If the two teams work for different companies, then they are now competing with one another in some form. The companies now need to decide if they want to compete against one another through differentiation or partner with each other to achieve leverage.
If the aim of the project is to create a Wintel PC platform, and only one of the teams is a Tier-1 PC manufacturer, the decision should be an easy one . . . would anyone that had a choice want to try to produce a PC with better quality, more features, and less cost than Dell? I don’t see many people trying to build their own cars or microwaves.
However, there is an emotional decision to make.
The customer has an engineering team that has dedicated themselves into this project. The team has researched the technology, worked with component vendors to overcome technical hurdles, created prototypes, published schedules, talked to customers and become emotionally invested in making this project succeed. Nothing would hurt more than having the project pulled from their hands while hearing all of that effort was not necessary in the first place.
What happens next?
That is always a toss-up. The customer may decide to keep forging along to avoid hurting the feelings of top talent. The customer may decide to cancel the project immediately and devote those same engineers towards working with Dell to ensure their most critical needs are met in next-generation products. In this case, the client is large and seems cautiously receptive to the idea of going the partnership route.
With the economic climate, our customers are experiencing incredible competition and consolidation in their marketplaces. How they allocate their resources over the next product development cycles will have huge ramifications for their valuations, and they know it.